The U.S. Court of Appeals for the D.C. Circuit has reaffirmed its prior ruling, directing the Securities and Exchange Commission (SEC) to review Grayscale Investments’ proposal to convert the crypto company’s leading GBTC fund into a Bitcoin exchange-traded fund (ETF).
This development comes after the SEC’s recent announcement that it does not intend to appeal the court’s decision.
Mandate Highlights Court’s Position on Spot Bitcoin ETFs
In a formal mandate, the U.S. Court of Appeals for the D.C. Circuit upheld its earlier August decision, instructing the SEC to reevaluate Grayscale Investments’ application to transform its primary GBTC fund into a spot Bitcoin ETF.
The mandate, filed on Monday, states, “In accordance with the judgment of August 29, 2023, and pursuant to Federal Rule of Appellate Procedure 41, this constitutes the formal mandate of this court,” emphasizing its commitment to its earlier ruling.
The court’s ruling in August centered on the SEC’s treatment of spot Bitcoin ETFs versus futures ETFs. The court argued that Grayscale’s proposed Bitcoin ETF shared similarities with already approved Bitcoin futures ETFs and should have “the same likelihood of detecting fraudulent or manipulative conduct in the market for Bitcoin and Bitcoin futures.”
Grayscale Submits Fresh Filing
On Thursday, Grayscale Investments submitted a new registration statement through an S-3 filing. If approved, the shares will be listed on NYSE Arca under the symbol GBTC. Grayscale plans to issue the shares ongoing, pending approval of its S-3 form and a separate 19b-4 filing from NYSE Arca.
Grayscale is one of many major players seeking SEC approval for spot Bitcoin ETFs. Industry giants like BlackRock and Fidelity are also pursuing this goal. In response to questions about these applications, SEC Chair Gary Gensler stated that the agency’s staff is actively reviewing multiple filings.
“What we have in front of us, just so that the viewing public understands, we have not one, but multiple, I think it’s eight or ten filings that the staff, and ultimately the Commission, is considering,” explained Gensler. He also emphasized that the process for approving exchange-traded products is well-established, with various divisions within the SEC providing feedback to potential issuers.
The agency has yet to approve any spot crypto ETF for listing on U.S. exchanges. However, it has approved investment vehicles linked to Bitcoin and Ether futures.
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