The $20 Billion Delay: Appeal Court Pushes Back Decision On Grayscale Spot Bitcoin ETF

Scott Matherson

Last Updated: June 11, 2024 8:15 am

3 mins read

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The D.C. Circuit Court of Appeals was expected to give a ruling on Grayscale’s Spot Bitcoin ETF lawsuit against the United States Securities and Exchange Commission (SEC) on August 22 following its failure to do so on August 18. However, the crypto community would have to wait longer as the court has once again failed to make a decision.

Court Delays Spot Bitcoin ETF Decision For The Third Time

According to a tweet by Grayscale’s Chief Legal Officer Craig Salm, the appeal court failed to make a decision regarding his company’s lawsuit against the SEC. However, he pointed out that there were no rulings for that day in what might be a move to quench any notion that the court was intentionally stalling the case.

This marks the third delay of the much-anticipated verdict, as the court had previously been expected to give a decision on August 15 and then August 18. So it remains uncertain when a decision could come next as legal experts had earlier projected the court to give its verdict this month.

Grayscale’s lawsuit against the SEC dates back to last year when the company reportedly tried to persuade the Commission to convert its $20 billion Grayscale Bitcoin Trust (GBTC) to a Spot Bitcoin ETF, which the SEC rejected.

Following the rejection, Grayscale sued the regulator, arguing that it had acted indiscriminately by not giving its request the same treatment it does to similar investment funds.

Grayscale believes that Spot Bitcoin ETFs should be approved like Bitcoin futures ETFs. In its final oral argument in March, the crypto firm argued that the SEC’s disapproval order against it was contradictory. It emphasized the regulator’s inconsistency in denying a Spot Bitcoin ETF while approving a Bitcoin futures ETF.

The company further argued that both investment vehicles pose the same risk of fraud and manipulation. It also stated that the pricing of both futures and spot bitcoin markets are “99.9% correlated,” which means they are subject to the same risk.

As such, since the SEC found the CME’s surveillance sharing agreement sufficient enough to protect against the risks in the futures market, it should be able to deem it sufficient to approve Spot Bitcoin ETFs.

BTC struggles to hold bears at bay | Source: BTCUSD on Tradingview.com

Why Grayscale’s Case Could Be A Game Changer

Grayscale is one of several financial firms that have applied to the SEC to offer a Spot Bitcoin ETF. Interestingly, the company filed this application while it awaits a decision from the court regarding its lawsuit against the SEC.

However, considering that the SEC has remained reluctant to approve these applications, a verdict in favor of Grayscale could potentially force the hands of the Commission to finally approve a Spot Bitcoin ETF.

Such a verdict will undoubtedly be a boost for the crypto industry as it would pave the way for institutional investors to have direct access to crypto assets, something which could further spur the mass adoption of cryptocurrencies.

Featured image from Coin Culture, chart from Tradingview.com

Scott Matherson

Scott Matherson is a prominent crypto writer at NewsBTC with a knack for capturing the pulse of the market, covering pivotal shifts, technological advancements, and regulatory changes with precision. Having witnessed the evolving landscape of the crypto world firsthand, Scott is able to dissect complex crypto topics and present them in an accessible and engaging manner. Scott's dedication to clarity and accuracy has made him an indispensable asset, helping to demystify the complex world of cryptocurrency for countless readers.

Scott’s experience spans a number of industries outside of crypto including banking and investment. He has brought his vast experience from these industries into crypto, which allows him to understand even the most complex topics and break them down in a way that is easy for readers from all works of life to understand. Scott’s pieces have helped to break down cryptocurrency processes and how they work, as well as the underlying groundbreaking technology that makes them so important to everyday life.

With years of experience in the crypto market, Scott began to focus on his true passion: writing. During this time, Scott has been able to author countless influential pieces that have drawn in millions of readers and have shaped public opinion across various important topics. His repertoire spans hundreds of articles on various sectors in the crypto industry, including decentralized finance (DeFi), decentralized exchanges (DEXes), Staking, Liquid Staking, emerging technologies, and non-fungible tokens (NFTs), among others.

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