The US Court of Appeals has again postponed its verdict on whether Grayscale can transform its popular Bitcoin Trust into a spot Bitcoin exchange-traded fund (ETF). The announcement was made by Craig Salm, Grayscale’s chief legal officer.
The latest deferral follows two previous ones earlier this year. The decision was anticipated by industry observers on Tuesday, August 22, based on the usual timelines for such cases.
However, the DC Circuit Court made no announcements, leaving stakeholders in suspense.
Grayscale sues SEC over ETF rejection
Grayscale sued the Securities and Exchange Commission (SEC) after the regulator denied the asset manager’s application to convert the $20 billion Grayscale Bitcoin Trust (GBTC) into an ETF in 2017.
The trust would enable retail investors to access bitcoin exposure more easily through regular brokerage accounts.
During a March 2023 hearing, Grayscale argued that the SEC unfairly rejected its application despite approving futures-based bitcoin ETFs in 2021.
The company claims that the Commission is inconsistent with its own logic on investment vehicles for the largest cryptocurrency by market capitalization.
SEC cites fraud and manipulation concerns
The SEC maintains that it cannot adequately protect investors from fraud and manipulation with a spot bitcoin ETF.
The Commission rejected over a dozen similar applications before approving the futures products.
With the regulatory status of bitcoin ETFs still unclear, cryptocurrency markets face ongoing uncertainty. The increasing delays in a decision have left investors and industry professionals eager for clarity.
The eventual ruling will provide crucial insights into the SEC’s views on expanding access to Bitcoin investments.
