Multiple perspectives: Grayscale wins the lawsuit, how far is the Bitcoin spot ETF?

Organization | Odaily Planet Daily

Author | Qin Xiaofeng

Tonight, court documents show that Grayscale has won a lawsuit against the US Securities and Exchange Commission (SEC).

In June last year, the SEC rejected Grayscale’s application to transform its Bitcoin trust GBTC into a Bitcoin spot ETF on the grounds that it “could not protect investors from fraud and market manipulation.” Grayscale then sued the SEC, and the two sides had a court argument in the District of Columbia Court of Appeals on March 7 this year.

After months of waiting, the case temporarily ended tonight with Grayscale’s victory. Grayscale CEO Sonnenshein expressed his gratitude to the Washington, D.C. Circuit Court for making a judgment in favor of Grayscale, and thanked investors for their support and encouragement. In addition, Grayscale’s legal team is actively reviewing the court’s opinion.

Does the victory of Grayscale mean that the Bitcoin spot ETF is about to be officially launched? All parties hold different opinions, Odaily Planet Daily organizes as follows:

Adam Cochran, partner at Cinneamhain Ventures, said that the SEC has three options for the court’s judgment: postpone the decision and propose a new reason for rejection; admit and approve (grayscale ETF); request all judges to appeal the case (full appeal). “However, given the reasoning behind the court’s decision and the fact that they (the court) have repeatedly pointed out that the SEC failed to support any of its arguments, a full appeal would be a terrible decision that would probably only irritate the court. So it’s a huge win.”

Bloomberg TV analyst Sonali Basak said: “This does not automatically mean that GBTC will be converted into an ETF immediately. As the court said, it only means that the US SEC failed to explain why it approved the Bitcoin futures ETP instead of Grayscale.” Proposed product (spot ETF).” She added that there is still a long process to go, including a 45-day appeal period, when the two sides will review the ruling, and the SEC can also request a full hearing. “It is unclear whether Grayscale will need to resubmit its application to convert GBTC into an ETF.”

Bloomberg ETF analyst James Seyffart commented that although Grayscale won the lawsuit, it does not mean that GBTC can be freely converted into ETF, but it makes the conversion a step forward.

Jake Chervinsky, Chief Policy Officer of the Blockchain Association, said that Grayscale has achieved a huge victory for the SEC. For a whole decade, the SEC rejected the Bitcoin ETF spot proposal on the grounds that it was “designed to prevent fraudulent and manipulative behavior and practices.” it’s over. However, the court did not order the SEC to approve Grayscale’s ETF proposal, it only said that the SEC’s analysis of the “fraud and manipulation” issue was wrong; now, the SEC must consider the court’s ruling and review Grayscale’s proposal again.

“What will the SEC do? One view is that the SEC will choose a different reason to reject Grayscale’s proposal and force a longer and more costly lawsuit. It’s possible, and it’s hard to underestimate the SEC leadership’s interest in crypto.” Extreme hostility to currencies. Another view is that the SEC will go downhill, using the DC Circuit decision as support for its exit from the anti-ETF stance. ‘We disagree, but we follow the rule of law’ The most plausible excuse for quitting a lost battle."

He added that the SEC would also face political pressure to approve a spot bitcoin ETF. This is not just a grayscale issue. TradFi is ready for Bitcoin ETFs. Traditional institutions, including BlackRock, have proposed Bitcoin spot ETFs this year. Now the question is, which way will the SEC choose? Want to make yourself more miserable? If there is another denial, there will be another lawsuit.

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