The U.S. Court of Appeals Reasserts Ruling on Grayscale’s Bitcoin ETF Bid
The U.S. Court of Appeals for the D.C. Circuit has issued a formal mandate to reaffirm its ruling that the Securities and Exchange Commission (SEC) needs to reconsider Grayscale Investments’ bid to convert its GBTC fund into a spot bitcoin exchange-traded fund (ETF). This move comes after the SEC announced that it would not appeal the ruling. However, it remains uncertain if the SEC could reject the application on other grounds.
The court’s mandate reiterates its August ruling, in which it addressed the SEC’s treatment of spot bitcoin ETFs and bitcoin futures ETFs. The court stated that Grayscale’s proposed bitcoin ETF is similar to already approved bitcoin futures ETFs and should have an equal chance of detecting fraudulent or manipulative conduct in the market.
Grayscale Takes Steps Forward
Following the court’s ruling, Grayscale has submitted a new registration statement through an S-3 filing, which is a shortened version of the typical S-1 filing used for offering new shares. If approved, GBTC intends to list the shares on NYSE Arca under the symbol GBTC and issue them on an ongoing basis.
Other prominent asset managers, such as BlackRock and Fidelity, are also seeking approval for spot bitcoin ETFs from the SEC. In response to inquiries about Grayscale, SEC Chair Gary Gensler stated that the agency’s staff is working on multiple filings but did not provide specific comments about Grayscale’s application.
Gensler explained that when an asset manager seeks to take a product public, such as an ETF, they need to register with the SEC and go through a process similar to an initial public offering (IPO). The SEC’s Division of Corporation Finance provides feedback to potential issuers, and the Division of Trading and Markets reviews the filings.
Hot Take: Grayscale’s Bitcoin ETF Bid Nears Approval
The reassertion of the court’s ruling by issuing a formal mandate puts Grayscale one step closer to obtaining approval for its bitcoin ETF. With other major asset managers also pursuing spot bitcoin ETFs, it is evident that there is significant interest in expanding access to cryptocurrency investment products. As the SEC continues its review process, the outcome of these applications will shape the future of crypto investment opportunities and regulatory frameworks in the United States.
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