The U.S. Court of Appeals Rules in Favor of Grayscale in Lawsuit Against SEC
The U.S. Court of Appeals for the D.C. Circuit has released its full letter explaining its decision to rule in Grayscale’s favor in its lawsuit with the Securities and Exchange Commission (SEC). The court found the SEC’s justification for favoring futures ETFs over spot products unreasonable and lacking evidence.
Key Points:
- Grayscale accused the SEC of arbitrary treatment in denying its Bitcoin fund’s conversion into a Bitcoin spot ETF, despite approving similar futures ETFs.
- The court determined that there is a strong correlation between bitcoin’s spot and futures markets, supporting Grayscale’s argument.
- The SEC’s argument that the correlation does not provide evidence of a causal economic relationship was deemed insufficient by the court.
- The SEC has been ordered to reconsider Grayscale’s ETF application, increasing the likelihood of a Bitcoin spot ETF being approved in the U.S.
- The ruling led to a surge in crypto markets and narrowed the discount of Grayscale’s GBTC stock against its underlying BTC to less than 20%.
Hot Take:
The U.S. Court of Appeals’ decision in favor of Grayscale is a significant win for the company and the crypto industry as a whole. It highlights the SEC’s unreasonable stance and lack of evidence in favoring futures ETFs over spot products. This ruling may pave the way for the approval of a Bitcoin spot ETF in the U.S., which could further legitimize and boost the adoption of cryptocurrencies.
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