U.S. court rules Grayscale vs. SEC lawsuit The SEC needs to re-examine the ETF application

Written by Stephen Alpher, CoinDesk; Compiled: Pine Snow, Golden Finance

The D.C. Circuit Court of Appeals ended the dispute between the U.S. Securities and Exchange Commission (SEC) and Grayscale with a final ruling, effectively ordering the agency to drop its rejection of the asset manager's spot bitcoin ETF application.

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Grayscale CEO Michael Sonnenshein will now await the SEC's next move in applying for a spot Bitcoin exchange-traded fund.

Monday's formal closure of the case essentially cemented the court's preliminary ruling two months ago that the SEC's decision to reject Grayscale's attempt to convert its roughly $17 billion Grayscale Bitcoin Trust (GBTC) into spot ETFs was "arbitrary and capricious."

The SEC chose not to appeal the ruling.

Now, the key point is back in the SEC's court, where the agency can choose to approve Grayscale's application, or it may deny it on other grounds. The SEC is also making decisions on a number of other spot Bitcoin ETF applications, including from asset management giants BlackRock, Fidelity, and Franklin Templeton.

"The Grayscale team looks forward to continuing to work constructively with the SEC to convert GBTC into an ETF," spokeswoman Jennifer Rosenthal said in a statement after the case closed Monday. "GBTC is operational ready and we intend to act as soon as possible on behalf of our investors.