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A U.S. Court Issues Mandate to Reconsider Grayscale Spot Bitcoin ETF Application

22/10/2023

In a significant development today, a Washington D.C. court issued a formal mandate, reaffirming its ruling from August, which directed the Securities and Exchange Commission (SEC) to revisit the application submitted by Grayscale Investments for a Spot Bitcoin Exchange-Traded Fund (ETF). The decision comes on the heels of the SEC's choice not to appeal the judgment in the Ripple XRP case. Judge Neomi Rao, in delivering the mandate, emphasized that the SEC's rejection of Grayscale's application for a Spot Bitcoin ETF lacked a clear and justifiable rationale, especially when similar financial products had been previously approved. It is worth noting that the SEC still has the opportunity to present a valid case for its decision.


The formal mandate, officially filed on Monday, states, "Pursuant to Federal Rule of Appellate Procedure 41 and in accordance with the judgment rendered on August 29, 2023, this document represents the official directive of this court."


Grayscale had previously argued that its proposed Bitcoin ETF was akin to already authorized Bitcoin futures ETFs, claiming that both had an equal capability to detect fraudulent or manipulative activities within the Bitcoin and Bitcoin futures markets, a point affirmed by the court.


Notably, several prominent asset management firms, including BlackRock and Fidelity, are actively seeking approval from the SEC for their respective Spot Bitcoin ETFs. This latest decision by the U.S. Court marks a significant step forward for multiple financial institutions in their pursuit of gaining SEC approval for Spot Bitcoin ETFs. Such approvals could substantially streamline the incorporation of cryptocurrency into traditional banking transactions, further enhancing their accessibility and utility in the financial industry.

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