SEC won't appeal Grayscale court ruling, paving way for spot bitcoin ETF

SEC won't appeal Grayscale court ruling, paving way for spot bitcoin ETF
The federal appeals court ruling in August was heralded by crypto advocates as a watershed moment for the industry.
OCT 14, 2023
By  Bloomberg

The Securities and Exchange Commission won't ask a federal appeals court to reconsider a decision that paves the way for Grayscale Investments to launch a spot Bitcoin exchange-traded fund, according to a person familiar with the matter.

In August, the DC Circuit Court of Appeals overturned the SEC’s rejection of Grayscale’s bid to convert its trust into an exchange-traded fund. The ruling was made by just three of the judges on the court and the regulator could have sought a review by a full slate of judges. The agency is not planning any other appeals in the case, said the person, who asked not to be identified discussing the ongoing matter.

Grayscale has said that investors would benefit from conversion to an ETF, as shares could be easily created and redeemed. The current closed-end structure doesn’t let investors redeem shares when prices decline, leading to trading at steep discounts relative to the underlying bitcoin. 

The August decision was heralded by crypto advocates as a watershed moment for the industry, and a rebuke of the SEC’s stance under Chair Gary Gensler. In that ruling, Judge Neomi Rao said the denial of Grayscale’s proposal was “arbitrary and capricious” because the regulator hadn’t explained its rationale. 

After the court’s ruling back in August, shares of GBTC rallied more than bitcoin did, with the trust’s discount to its underlying holdings narrowing significantly. The gap earlier this year stood above 45% but has constricted to below 20%, data compiled by Bloomberg show. 

The case is Grayscale v. SEC, 22-1142, US Court of Appeals for the District of Columbia Circuit.

Bitcoin ETFs could encourage adviser use of crypto

Latest News

Advisor moves: Wells Fargo FiNet, LPL Financial, Raymond James, Janney, Ameriprise
Advisor moves: Wells Fargo FiNet, LPL Financial, Raymond James, Janney, Ameriprise

Firms announce new recruits including wirehouse breakaways.

Ashton Thomas-linked Amplify debuts QuantumRisk to help RIAs weather market shocks
Ashton Thomas-linked Amplify debuts QuantumRisk to help RIAs weather market shocks

"QuantumRisk, by design, recognizes that these so-called “impossible” events actually happen, and it accounts for them in a way that advisors can see and plan for," Dr. Ron Piccinini told InvestmentNews.

Turning conversations into clients: Attract prospects and gain new clients with these five strategies
Turning conversations into clients: Attract prospects and gain new clients with these five strategies

Advisors who invest time and energy on vital projects for their practice could still be missing growth opportunities – unless they get serious about client-facing activities.

Tax Foundation analysis highlights biggest OBBBA beneficiary states, counties
Tax Foundation analysis highlights biggest OBBBA beneficiary states, counties

The policy research institution calculates thousands in tax cuts for Washington, Wyoming, and Massachusetts residents on average, with milder reductions for those dwelling in wealth hotspots.

Meltdown of some Yieldstreet real estate funds raises eyebrows from financial advice industry
Meltdown of some Yieldstreet real estate funds raises eyebrows from financial advice industry

Yieldstreet real estate funds turned out to be far riskier than some clients believed them to be, according to CNBC.

SPONSORED How advisors can build for high-net-worth complexity

Orion's Tom Wilson on delivering coordinated, high-touch service in a world where returns alone no longer set you apart.

SPONSORED RILAs bring stability, growth during volatile markets

Barely a decade old, registered index-linked annuities have quickly surged in popularity, thanks to their unique blend of protection and growth potential—an appealing option for investors looking to chart a steadier course through today's choppy market waters, says Myles Lambert, Brighthouse Financial.