Court decision on Grayscale v. SEC lawsuit could prove crucial for all spot Bitcoin ETF applicants

Investors and applicants funny successful spot Bitcoin exchange-traded funds (ETFs) are keeping a adjacent oculus connected the ongoing tribunal lawsuit betwixt Grayscale and the U.S. Securities and Exchange Commission (SEC

On June 29, 2022, the U.S. SEC rejected Grayscale’s exertion to person the Grayscale Bitcoin Trust to a spot Bitcoin ETF. The aforesaid day, Grayscale filed an entreaty successful D.C. tribunal challenging the SEC’s decision.

The court’s determination connected the suit could dictate the destiny of the drawstring of spot Bitcoin ETF applications filed past month.

Grayscale claims the SEC acted “arbitrarily and capriciously”

The crux of Grayscale’s statement is that the SEC acted “arbitrarily and capriciously” successful rejecting spot Bitcoin ETF applications, particularly considering it had already approved Bitcoin futures ETFs. The SEC violated the Securities Exchange Act with its “unfair discrimination” against spot Bitcoin ETF issuers, Grayscale alleges.

In different words, Grayscale believes that the spot and futures Bitcoin ETFs airs akin risks and should beryllium treated equally. Moreover, some spot and Bitcoin futures ETFs are priced based connected the aforesaid underlying spot markets — different crushed wherefore they should beryllium treated equally, Grayscale argues.

Grayscale delivered its last oral arguments successful the lawsuit connected March 7. The SEC that time argued that spot and Bitcoin futures ETFs person a correlation, but that correlation does not equate to causation. The crux of the SEC’s statement is that spot Bitcoin ETFs are much susceptible to manipulation and fraud due to the fact that the underlying spot marketplace remains unregulated. However, the regulated Chicago Mercantile Exchange, wherever Bitcoin futures ETFs trade, has capable safeguards against fraud and manipulation.

Looking forward

The tribunal decision, careless of the outcome, volition beryllium important for each those looking to contented spot Bitcoin ETFs successful the U.S. If Grayscale wins, the SEC could entreaty the determination successful a higher court. If Grayscale loses, the steadfast could telephone for an “en banc” hearing, which is uncommon — successful specified hearings, each judges of the D.C. Circuit volition measurement successful connected the case. Or, Grayscale could entreaty the determination successful the Supreme Court.

Given that galore marketplace analysts are optimistic astir the support of spot Bitcoin ETF applications, the tribunal ruling, successful this case, could importantly power the outlook for specified ETF issuers.

The station Court determination connected Grayscale v. SEC suit could beryllium important for each spot Bitcoin ETF applicants appeared archetypal connected CryptoSlate.