A Federal court in D.C has quashed SEC’s earlier rejection of Grayscale’s application to convert its huge fund into a Bitcoin ETF.
It appears that SEC has fallen out of favor in this matter. The Judge, while meting out justice, noted that the regulatory body was overreaching in its decision to reject Grayscale’s application without proper review. As such, SEC will have to do another review of the application and make a better, more informed decision.
Grayscale Has A Huge Fund
Grayscale is one of the largest Bitcoin-related funds in the industry, and has been actively attracting investors into its fold. For context, it’s notable that Grayscale’s Bitcoin fund is around 4.5 times that of MicroStrategy. It holds around 635,236 BTC while MicroStrategy holds around 155,200 BTC. By this metric, Grayscale is clearly a heavy-hitter in the Bitcoin industry.
Is A Bitcoin ETF Coming Soon?
Just recently, a number of other heavy-hitters, led by BlackRock, applied for Bitcoin ETF. While the decisions are still awaited, the community is optimistic that SEC will finally grant a spot ETF. The body has already approved a number of Bitcoin futures ETFs.
With the Grayscale case now showing an upside, there’s even optimism that a ETF is around the corner. Some have predicted this to happen before the end of 2023. SEC Chairman Gary Gensler and his team at SEC have until March 2024 to decide on them.
Banter Of The Winners
Grayscale’s own CEO Sonnenshein took to Twitter/X to express his joy and give regards to the fund’s supporters.
Coinbase CEO Brian Armstrong showed up to congratulate Grayscale for the win, noting that winning against SEC seems to be the rite of passage for entities in the crypto space these days. Coinbase recently had its moment against SEC as well.
Not The First Bad Moment For SEC
Granted, the US SEC has been known to dish out suits against crypto entities with abandon, but some of these cases have strongly boomeranged to SEC’s chagrin. Case in point is the much-publicized case against Ripple, the creator of XRP. SEC lost the case after years of courtroom battle.
The Grayscale case now makes the second high-profile case lost by SEC. These incidents have exposed serious inadequacies in SEC’s regulatory drive and led some to believe that the body is incompetent. SEC has also been accused of witch-hunting the crypto industry. It’s be interesting to see what happens when Grayscale’s Bitcoin ETF application is reviewed again.
