The United States Securities and Exchange Commission (SEC) has exceeded its mid-October deadline to refute Grayscale’s court win for the approval of a spot Bitcoin exchange-traded fund (ETF).
The financial agency will not appeal in court regarding the decision, Reuters reported on October 13th, citing a source familiar with the matter.
SEC vs. Grayscale
The legal tussle between the American regulator and the asset management firm dates back to last year. Grayscale applied with the SEC, requesting the conversion of its flagship product, Grayscale Bitcoin Trust (GBTC), into a spot Bitcoin ETF. The conversion intention is part of the investment company’s plan to convert its major Trust products into ETFs.
Receiving a green light on the application would allow Grayscale to offer a Bitcoin-backed asset that tracks Bitcoin’s price more efficiently than GBTC. Shortly after the agency dismissed Grayscale’s request last year, the investment company filed a lawsuit against the SEC.
After a year-long legal battle, Grayscale secured a groundbreaking court win from a federal court presided over by three judges in August. The judges directed the SEC to consider approving Grayscale’s request for a spot Bitcoin ETF, terming its continued delay as “capricious.”
Following the August 29th court decision supporting Grayscale, the financial regulator had a 45-day window to file for an en banc court hearing, a kind of hearing where all the court judges come together to decide a matter instead of having a single judge or a small panel of judges presiding over the case.
An Approval in View?
Admittedly, the SEC’s decision to hold back from challenging the August court ruling involving Grayscale’s Bitcoin ETF allows the financial watchdog to review the company’s application.
However, it does not directly imply that the long-awaited spot Bitcoin ETF will be endorsed within the country. Jennifer Schulp, the director of financial regulation studies at the Cato Institute’s Center for Monetary and Financial Alternatives, reiterated this when she said:
“It doesn’t mean that that approval is coming quickly and it’s still not a certainty given that the SEC could re-review and deny on different grounds and basically start this legal fight all over again.”
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