A US federal appeals court has ruled that the SEC’s rejection of Grayscale’s application for a spot Bitcoin ETF was incorrect.
Grayscale filed suit against the SEC in June 2022 after the agency rejected its application to make GBTC an ETF.
The company argued that the SEC acted arbitrarily by not applying the same approach to similar investment products and therefore violated the Administrative Procedure Act and the Securities Exchange Act of 1934.
At the trial, Grayscale presented evidence that GBTC (Grayscale Bitcoin Trust) met all of the requirements for registration as an ETF and that converting GBTC to an ETF would benefit investors and the market as a whole.
The company also pointed out that the SEC has approved several bitcoin futures ETFs that have more risks and complexities than a spot bitcoin ETF.
Grayscale commented the court’s decision calling it a huge step forward for US investors and the Bitcoin ecosystem.