The U.S. Securities and Exchange Commission (SEC) is responding to its courtroom loss this week to Stamford-based Grayscale by delaying approval decisions for spot Bitcoin exchange-traded funds (ETF) from multiple companies.
The D.C. Circuit Court of Appeals ruled that the SEC”™s “denial of Grayscale”™s proposal was arbitrary and capricious,” adding that the SEC “failed to adequately explain why it approved the listing of two bitcoin futures ETPs but not Grayscale”™s proposed bitcoin ETP. In the absence of a coherent explanation, this unlike regulatory treatment of like products is unlawful.”
Grayscale sought the conversion of its Grayscale Bitcoin Trust (GBTC) (OTCQX: GBTC) into an ETF. In the wake of the ruling, Reuters reported the SEC not only delayed its decision on Grayscale”™s request, but also pushed back decision dates on similar proposals from BlackRock (NYSE:BLK), Invesco (NYSE:IVZ), WisdomTree (NYSE:WT) and Valkyrie (NASDAQ:BTF) to mid-October.
Spot Bitcoin ETFs track the performance of Bitcoin with the custody of the asset being held by the ETF manager. These are open-end funds that can issue or redeem shares based on demand. The SEC has rejected dozens of applications for spot bitcoin ETFs and could potentially delay its decision on the current proposals further into the year or postpone it into 2024.
