SEC Reasseses Court Opinion After Losing in Grayscale Case
Journalist Eleanor Terrett of FOX Business took to Twitter today to unveil a statement from the U.S. Securities and Exchange Commission (SEC) about their next steps in the ongoing Grayscale case. According to the SEC, the agency is currently evaluating the recent court opinion to determine its subsequent actions.
🚨NEW: In a statement to @FoxBusiness, the @SECGov says it’s reviewing the court’s decision to determine next steps in the @Grayscale case.
— Eleanor Terrett (@EleanorTerrett) August 29, 2023
ETFs update specialist James Seyffart provided insights into the potential course of action for the SEC. In terms of appeals, the SEC has approximately 45 days to seek an en banc hearing involving all judges.
Meanwhile, John Deaton, a pro-XRP lawyer, remarked on Terrett’s statement, raising questions about SEC Chairman Gensler’s response to the decision. Deaton wondered whether Gensler would “accept defeat, or dig in his heels even more, or choose more delay.”
As per Crypto Capital Venture founder Dan Gambardello, “Gary won’t accept defeat.” Gambardello emphasized that Gensler’s playbook has consistently demonstrated his refusal to concede, a principle that has become evident over the past year.
On August 29, the U.S. Court of Appeals Circuit ruled in favor of the crypto asset manager Grayscale Investments in its petition against the SEC. Judge Neomi Rao ordered that Grayscale’s review petition be granted and the Commission’s order be vacated.
This ruling emerged from an appeal lodged by Grayscale, challenging a SEC order that denied Grayscale’s application to convert its flagship product, Grayscale Bitcoin Trust (GBTC), into a Bitcoin spot exchange-traded fund (ETF).
The court found the SEC’s decision inconsistent, as it had previously approved two similar bitcoin futures products. The court sided with Grayscale, asserting that treating comparable cases differently constitutes “arbitrary and capricious” behavior in administrative law.
According to Grayscale, the court’s decision is a “monumental step.” However, this doesn’t guarantee the eventual listing of a Grayscale spot BTC ETF, although it does bring that possibility closer. Similarly, Grayscale’s CEO, Michael Sonnenshein, mentioned that their legal team is reviewing the court’s opinion.