Key takeaways:
- In response to a ruling that mandated the SEC to investigate Grayscale’s application for a spot Bitcoin ETF, the US Court of Appeals issued a mandate.
- The mandate came about due to the court’s August 29 original decision and the SEC’s failure to file an appeal by October 13.
In response to a ruling that mandated the Securities and Exchange Commission (SEC) to investigate Grayscale Investments’ application for a spot Bitcoin exchange-traded fund, the United States Court of Appeals issued a mandate.
The “formal mandate” of the court went into force on October 23, according to a filing in the US Court of Appeals for the District of Columbia Circuit. This allowed the SEC to revisit its ruling on Grayscale’s spot Bitcoin Exchange Traded Fund (ETF). The mandate came about as a result of the court’s August 29 original decision and the SEC’s failure to file an appeal by October 13.
The court’s August 29 decision was upheld by the mandate dated October 23, providing Grayscale another opportunity to transform its Grayscale Bitcoin Trust into a listed BTC ETF.
The SEC has approved investment vehicles connected to Bitcoin and Ether futures, but it has not yet approved a single spot crypto ETF for listing on US exchanges.
Grayscale argues that because their proposed Bitcoin ETF has the same features as authorized Bitcoin futures ETFs, it shouldn’t encounter unreasonable obstacles, and the mandate supports this claim. Remarkably, instead of using the traditional S-1 procedure for fresh share sales, the company resubmitted its application through an expedited S-3 filing.
Furthermore, Grayscale intends to list its shares on NYSE Arca, provided that its existing submissions—which include a separate filing required by NYSE Arca—are approved.
Nevertheless, uncertainty remains regarding the SEC’s future actions despite the court’s insistence. Market players are kept on their toes by the regulatory body’s ability to discover fresh reasons for rejection, which is infamous for its rigorous scrutiny.
Grayscale is not the only one pursuing this. Huge players in the market, such as Fidelity and BlackRock, have entered the fray and are vying for a seat in Bitcoin ETFs with the approval of the SEC.
SEC Chair Gary Gensler did not address Grayscale’s issue, although he confirmed that the agency had received several filings. He also described the stringent review procedure suggestions go through, which is comparable to the screening process for public offerings and highlights the agency’s dedication to careful assessment.
The sheer number of entries shows that interest in these financial products is rising. It also implies that the SEC has to strike a balance between consumer protection and market innovation in a complicated web of applications.
