SEC Chooses Not To Appeal Court Judgement On Grayscale BTC-ETF

The U.S. Securities and Exchange Commission (SEC) has decided not to appeal the August 29 decision of the U.S. District of Columbia Court of Appeals, making this a historic move that has reverberated throughout the cryptocurrency and financial industries.

After the SEC rejected the application, the court allowed Grayscale’s request to transform its flagship Grayscale Bitcoin Trust (GBTC) into a spot Bitcoin exchange-traded fund (ETF). The SEC has been ordered to evaluate Grayscale’s application due to its decision not to appeal the court’s judgment, which might lead to a change in how bitcoin investments are made.

The legal dispute started when the SEC rejected Grayscale’s initial proposal to transform its GBTC into a spot Bitcoin ETF. The corporation appealed the choice, and on August 29th, the U.S. District Court of Appeals in Washington, DC, decided to favor Grayscale.

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Semilore Faleti, with the Bitcoinist platform, said this development might encourage other financial organizations to consider releasing their cryptocurrency-based ETFs. However, BlackRock and Fidelity Investments are two significant participants in the financial sector who have been closely monitoring this development while waiting for regulatory clarification before announcing their offerings.

It was also gathered that the SEC has warned the rest of the cryptocurrency community that the latest development does not mean they will automatically approve the stipulated ETF applications. Investigations show that in August, the ETF team at Bloomberg, comprising of industry analysts Eric Balchunas and James Seyffart, put the chances of SEC approving the spot BTC ETF in 2023 at 75% and 90% in 2024.

Bloomberg yesterday reaffirmed that prediction owing to the recent development and the joint ETF application by major companies like 21 Shares and Ark Invest.

Bloomberg Recalls Earlier Predictions, As 2024 Application Deadline Remains

According to article published on the Bitcoinist platform, the decision not to file an appeal also suggests that the SEC may change its stance on cryptocurrency. Although historically, the regulatory body has been cautious in scrutinizing digital assets, this choice reflects a recognition of the development of the business and the need to adapt to shifting circumstances.

It shows that the SEC is willing to adapt to the changing environment of digital finance to give investors new opportunities while keeping an eye on investor protection. In recent observation, the SEC’s ruling will significantly impact. It is likely going to signals a wider shift in the banking system’s acceptance of cryptocurrencies.

Eric and James, in their recent posts on their X handles, said that the ARK/21Shares BTC ETF application has added five more pages, a move they say projects “constructive conversation” with the  United States Securities and Exchange Commission (SEC), who has also hinted that investment funds could be approved anytime soon.

Information also states that applicants must send their application until January 10, 2024: the official deadline. Recall that early last year, the SEC frustrated the spot BTC ETF applications by major United States-based financial institutions. According to the SEC, the decision was made due to the applicant’s inability to prove to the commission how they plan to protect their investors from possible market manipulation.

The applicants, including Ark/21Shares, returned to draft a recommendation regarding the latest request. In their proposal, they’d opt for a surveillance-sharing system with Coinbase, one of the United States’ biggest cryptocurrency exchanges.