The U.S. Securities and Exchange Commission (SEC) to reconsider its prior decision to reject Grayscale Investments’ ambitious attempt to establish a spot bitcoin exchange-traded fund (ETF). This judicial intervention could mark a historic turning point, potentially leading to the debut of the very first spot Bitcoin ETF in the United States.
The significance of this development lies in its potential to democratize bitcoin investment, simplifying the process for the general public by skipping the need to directly purchase the cryptocurrency and sidestepping issues surrounding custody provider vulnerabilities.
Throughout its history, the SEC has consistently overlooked applications for bitcoin ETFs, quoting various concerns. This recent court ruling, however, sheds light on a critical issue, the SEC’s failure to provide transparent and coherent explanations for treating clearly similar cases disparately.
The court’s decision highlights the principle of uniformity in regulatory decisions, emphasizing that similar cases should be handled consistently. Importantly, this ruling does not serve as an outright acceptance of Grayscale’s ETF proposal; instead, it mandates the SEC to conduct a thorough review of the application.
The court explicitly requires the SEC to provide a more comprehensive explanation for its divergent treatment of comparable investment products. The court’s attention was attracted to Grayscale’s argument that their proposed bitcoin ETF closely reflects already approved bitcoin futures ETFs in terms of asset correlation and market surveillance agreements.
This legal breakthrough carries considerable weight for Grayscale and the broader investment ecosystem. Grayscale is actively engaging with the SEC to move forward constructively, interpreting this ruling as a pivotal advancement toward fostering broader access to bitcoin investment. Industry experts view this development as a tangible step toward opening doors for wider public participation in the evolving landscape of cryptocurrency investment.
In a report by Todayq News on July 13, 2021, Grayscale Investments announced the selection of BNY Mellon to oversee asset services for the Grayscale Bitcoin Trust. It was stated that BNY Mellon had been chosen to manage fund accounting and administration for the trust. This partnership was anticipated to provide Grayscale with enhanced scalability, reliability, and efficiency through BNY Mellon’s advanced platform, including their ETF Center tailored specifically for digital asset ETFs, although the SEC rejected its applied application.