[NEWS] US SEC declines to appeal lawsuit against Grayscale over ETF conversion

The US Securities and Exchange Commission (SEC) did not appeal the ruling in a court case regarding the conversion of GBTC (Bitcoin mutual fund) offered by Grayscale, a major cryptocurrency management company, into a spot ETF. The deadline for the appeal was the 13th local time.

The lawsuit was filed by Grayscale in June last year after the SEC rejected the conversion of GBTC into a spot ETF.

The court then pointed out at the end of August this year that "the SEC's rejection of the application was arbitrary and capricious," and ordered a re-examination of Grayscale's application, citing a lack of explanation of the differences between the product and other similar products.

Although the victory in this case has increased the chances that Grayscale's ETF conversion application will be approved, the SEC can reject it again. However, if it is rejected, Grayscale may take legal action again, and it will need to prepare a reasonable reason. Therefore, the SEC is also expected to carefully consider whether to approve it.

The outcome of this lawsuit will also boost the approval of Bitcoin spot ETFs applied for by companies other than Grayscale.

Currently, the SEC, which is seeking approval of Bitcoin spot ETFs from BlackRock, the world's largest asset management company, VanEck, Invesco, and others, has rejected the approval of spot ETFs on numerous occasions in the past, so it is possible that the SEC will reject the applications for investor protection and other deficiencies.

However, since a precedent was set in the lawsuit against Grayscale, it is unclear whether the SEC will make a decision as usual.

The deadline for the decision on the spot ETFs applied for by BlackRock and others has been extended until around January next year, and attention is focused on what decision the SEC will make.

Reference:Reuters
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