- The US Court ruled in favor of Grayscale arguing that the SEC was wrong in its rejection of Grayscale’s BTC ETF application.
- The Judge ordered to review Grayscale’s petition claiming that the SEC has failed to produce a clear explanation for their action.
- Following the ruling, Bitcoin surged by 6%, currently reaching above $27,000.
Bitcoin, the largest cryptocurrency by market cap, witnessed a substantial spike of 6% on Tuesday, following a court ruling that favored the investment management company Grayscale Investments in a lawsuit against the Securities and Exchange Commission (SEC). In a filing dated August 29, the court declared that the SEC is not justifiable in the denial of Grayscale’s application to create a spot bitcoin exchange-traded fund.
In the recent court filing, the U.S. Court of Appeals Circuit Judge Neomi Rao released an order to review the company’s petition on the grounds of the SEC’s failure to provide adequate explanation for rejecting Grayscale’s request. The Judge explained, “The denial of Grayscale’s proposal was arbitrary and capricious because the Commission failed to explain its different treatment of similar products”.
Crypto analyst Walter Bloomberg took to Twitter to share insights on the positive track of Bitcoin after the court ruling. According to his thread, the court filing could help BTC enthusiasts to invest in the cryptocurrency, as it clears “the path for the first ETF offering direct exposure to Bitcoin”. At press time, Bitcoin is trading at $27,451.92, showing a hike of 5.44% in one day.
In October 2021, Grayscale filed an application with the SEC to convert Grayscale Bitcoin Trust (GBTC) into a Bitcoin Spot ETF. However, the regulators rejected the application on the claims that Grayscale’s security measures against market manipulation and threats were vague.
Soon after the denial of the application, Grayscale filed a lawsuit against the SEC, requesting the court to review its request. Though the court’s current decision isn’t demonstrative of an obvious success for the company in its venture to convert the Grayscale Bitcoin Trust to an ETF, the ruling provides solace.
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