Bitcoin ETF gets closer: SEC loses battle against Grayscale

While the SEC is waging an anti-crypto war, the US regulator has just suffered a setback against Grayscale regarding the Bitcoin ETF. The federal court ruled today in favor of Grayscale’s petition for review. In setting aside the SEC’s order, the court ruled in favor of the American investment giant. This decision could pave the way for approval of the Bitcoin ETF.

Review granted for Grayscale

Last July, Grayscale sued the SEC for rejecting its application for a Bitcoin spot ETF in 2022. Yesterday, the U.S. District Court for the District of Columbia ruled in Grayscale’s favor, finding that the SEC’s rejection of this spot Bitcoin ETF was improper. It ordered that Grayscale US’s petition for review be granted. But also, that the SEC’s order be set aside. The ruling obliges the Commission to reconsider its rejection of Grayscale Bitcoin Trust’s (GBTC) application for conversion into an ETF.

BREAKING: 🇺🇸 Grayscale wins its lawsuit against the SEC over converting its fund to a spot #Bitcoin ETF. pic.twitter.com/nxUsTHU12Q

— Bitcoin Magazine (@BitcoinMagazine) August 29, 2023

The judge’s decision marks Grayscale’s victory over the SEC. The US regulator wrongly rejected Grayscale’s application to list an ETF that tracks the price of Bitcoin. The crypto community has been following this case closely, trying for years to convince the SEC to approve this ETF.

Bitcoin ETF on the verge of approval

This news suggests that the Bitcoin ETF could be validated. This will enable investors to gain exposure to Bitcoin (BTC) without having to own it. With the ETF race raging in the financial sector, Grayscale’s action marks a decisive step forward. As a reminder, Grayscale had already applied to the SEC for ETF approval in October 2021.

ETF analyst James Seyffart: This does not mean GBTC is automatically converting into an ETF, but it certainly brings things one step closer. SEC has to issue another order with a deadline of 45 days or 60 days. As far as appeals go, the SEC has 45 days to file for an en banc…

— Wu Blockchain (@WuBlockchain) August 29, 2023

However, the SEC is concerned that this type of asset is vulnerable to manipulation. However, Jay Clayton, former SEC chairman, says the bitcoin ETF could be approved. He explains that this would be possible if there are appropriate regulatory safeguards, similar to those in the futures market.

In response to this “SEC defeat”, the bitcoin (BTC) price climbed 5% within an hour.