[NEW] Grayscale wins lawsuit against SEC, giving a big boost to approval of Bitcoin spot ETF

On the 29th, the US Federal Court of Appeals ordered the US Securities and Exchange Commission (SEC) to review its rejection of Grayscale's application to convert a Bitcoin mutual fund into an ETF last year.

The lawsuit was filed by Grayscale in June last year, dissatisfied with the rejection of the application. This ruling effectively marks a victory for Grayscale.

Grayscale argued that the SEC's approval of a Bitcoin futures ETF, but its refusal to approve a Bitcoin ETF that directly holds physical assets, was arbitrary.

According to the filing, the ruling granted Grayscale's request for review and ordered the "SEC's order to be set aside," which means that the SEC must reexamine Grayscale's application that it rejected.

In her ruling, Judge Neomi Rao of the appeals court said, "The SEC's rejection of the application is arbitrary and capricious. It fails to explain the differences between the product and other similar products," which agreed with Grayscale's argument. He also noted that the SEC has approved a Bitcoin futures ETF, and said Grayscale's application should be considered in comparison with similar applications.

Grayscale CEO Michael Sonnenshein said in the announcement that "this is a historic milestone for U.S. investors, the Bitcoin ecosystem, and all those who have advocated for exposure to Bitcoin through ETFs."

Looking ahead, he added that Grayscale will "pursue next steps" in cooperation with the SEC to list a Bitcoin spot ETF.

With the ruling in Grayscale's favor, Bitcoin (BTC) rose significantly, temporarily reaching $28,000 (approximately 4.2 million yen). The price of altcoins also rose in tandem with Bitcoin, and the cryptocurrency market rose across the board.

The SEC has been stepping up its crackdown on the cryptocurrency market this year. In June, it filed lawsuits against major cryptocurrency exchanges Binance and Coinbase in succession, claiming that many cryptocurrencies are securities and violated securities laws.

In addition, a ruling was made last month on the issue of securities for XRP offered by the US company Ripple, which was filed in 2020, and it was determined that although it is an unregistered security when sold to institutional investors, it is not a security when sold to general investors.

The SEC had argued that XRP for general investors is also a security, so the ruling was relatively favorable to Ripple.

Currently, there is a lot of activity in the United States, with asset management giant BlackRock applying for a Bitcoin spot ETF. In this context, this ruling could be a major boost to the approval of a Bitcoin spot ETF.

Reference:Court ruling, Grayscale announcement
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