The U.S. Court of Appeals for the D.C. Circuit has ordered the Securities and Exchange Commission (SEC) to reassess Grayscale Investments’ request for a spot Bitcoin ETF.
This directive follows the court’s previous ruling, emphasizing the similarities between Grayscale’s proposal and the already approved Bitcoin futures ETFs. Consequently, the court has identified that Grayscale’s product warrants approval due to its comparable ability to identify market misconduct.
The court issued its official directive as a routine procedural step following the SEC’s decision not to contest the August ruling. In response, Grayscale has taken action and submitted a revised application to transform its flagship GBTC fund into a fully-fledged ETF. This recent development prompted their proactive move.
The Grayscale mandate asserts that their proposed Bitcoin ETF shares many similarities with the already approved Bitcoin futures ETFs. Therefore, they anticipate encountering minimal obstacles.
It is worth noting that the company has chosen to refile its application via an expedited S-3 filing process rather than the usual S-1 procedure for new share offerings. Additionally, Grayscale plans to list their shares on NYSE Arca pending approval of their current submissions, including a separate filing required by NYSE Arca.
BlackRock & Fidelity Enter The Bitcoin ETF Arena Alongside Grayscale
However, uncertainty lingers regarding the future actions of the SEC despite the court’s encouragement. As a regulatory agency renowned for its meticulous examination process, it still possesses the authority to uncover new grounds for refusal, demanding constant vigilance from market participants.
Grayscale is not the sole participant in this endeavor. Other significant competitors in the industry, including BlackRock and Fidelity, have also entered the arena, seeking the SEC’s approval to launch their own Bitcoin ETFs.
SEC Chair Gary Gensler has acknowledged receiving multiple applications without specifically addressing Grayscale’s case. Furthermore, he emphasized that these proposals undergo a meticulous review process comparable to the scrutiny faced by public offerings, highlighting the agency’s commitment to thorough evaluation.
The surge in submissions reflects a growing demand for these financial products. However, it also poses a challenge for the SEC as they navigate through an intricate realm of applications while carefully balancing market innovation and consumer protection.
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The author’s views are for reference only and shall not constitute any investment advice. Please ensure you fully understand and assess the products and associated risks before purchasing.
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