Thu. May 23rd, 2024

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  • A federal appeals court has sided with Grayscale Investments in its lawsuit against the SEC. 
  • The court rules that the SEC must reverse its rejection of Grayscale’s spot Bitcoin ETF and review the application. 
  • Top cryptocurrencies including Bitcoin, Ethereum, and BNB witnessed a significant hike following the court ruling. 

In a watershed moment for the crypto industry, a U.S. federal appeals court has sided with GBTC issuer Grayscale Investments in its lawsuit against the Securities and Exchange Commission (SEC) regarding its spot Bitcoin ETF application. The court ruled that the securities regulator must reverse its rejection of the spot Bitcoin ETF and review Grayscale’s application for the same. 

BTC Gains 6% After Court Sides With Grayscale

According to the ruling by the United States Court of Appeals for the DC Circuit, Grayscale’s petition for review has been granted while the SEC has been ordered to vacate its previous order rejecting the GBTC issuer’s spot Bitcoin ETF application. The ruling comes more than a year after Grayscale sued the SEC for rejecting its application. 

In a separate Opinion for the Court filed by Circuit Judge Rao, the court highlighted that federal agencies must treat cases alike, referring to the SEC’s unequal treatment of spot BTC ETFs and BTC Futures ETFs. The court further noted that the securities regulator applied the Howey Test unreasonably while evaluating Grayscale’s application. 

The denial of Grayscale’s proposal was arbitrary and capricious because the Commission failed to explain its different treatment of similar products.”

United States Court of Appeals

The judges blasted the SEC for failing to explain how Grayscale’s spot BTC ETF would influence the price of Bitcoin futures traded on the Chicago Mercantile Exchange. They also highlighted that the securities regulator dismissed evidence that could have mitigated concerns surrounding Grayscale’s application. 

The federal appeals court’s ruling led to a 5.9% hike in the price of Bitcoin. The latest development also triggered a rally leading to a considerable increase in the prices of other cryptocurrencies including ETH (4.6%), BNB (6%), XRP (4.5%), ADA (6%), etc. 

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By umair

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