A US court rules that the SEC must review its rejection of Grayscale's bid to convert the Grayscale Bitcoin Trust into an ETF after approving two bitcoin ETPs
a federal appeals court one step removed from SCOTUS—with a remarkably unanimous decision from an ideologically diverse panel. The 3 judges ruled the SEC failed to adequately explain its disparate treatment of one BTCETF... @billhughesdc : From @matt_levine's newsletter today covering Grayscale v. SEC. I think we all know it is really the latter, although not everyone needs to say that out loud. “One possible interpretation of this case is that the SEC's decision to block spot Bitcoin ETFs was unusually... Chamath Palihapitiya / @chamath : Let's fucking go!!!!!!!!!!! [image] Jeremy Hogan / @attorneyjeremy1 : Everyone, welcome “Big Money” to the table. For better, or worse. https://www.msn.com/... @cryptokaleo : LET'S GOOOOOO Palley / @stephendpalley : The D.C. Circuit Court of Appeals holds that the SEC acted in an arbitrary and capricious in denying Grayscale's proposed bitcoin fund. This is a hard standard to meet: it's the Court telling the SEC it had no basis for the decision & just made it up. https://www.docdroid.net/... Jake Chervinsky / @jchervinsky : Grayscale wins. The SEC's war on crypto is falling apart in the courts. Michael Saylor⚡️ / @saylor : The District of Columbia Court of Appeals has paved the way for bitcoin exchange-traded funds. https://www.cnbc.com/... Forums: r/Bitcoin : Court sides with Grayscale in closely watched Bitcoin ETF case r/ethtrader : SEC Must Review Grayscale's ETF Bid After Previous Rejection, Appeals Court Rules r/btc : Court rules GBTC can be converted to an ETF, SEC must review. BCHG (BCH fund) may be next to be converted to an ETF.
CoinDesk
Context & Ripple Effects
Grayscale’s conversion effort followed its 2022 lawsuit challenging the SEC’s rejection, while the agency had previously revisited disapproval orders for several bitcoin ETF proposals. The case centers on whether the SEC could treat Grayscale’s proposed product differently after approving two bitcoin ETPs.
The SEC must review its rejection of Grayscale’s bid to convert the Grayscale Bitcoin Trust into an ETF and explain any differing treatment from the two approved bitcoin ETPs.
Grayscale gains a renewed regulatory route for its conversion proposal, but the court does not itself authorize the ETF.
Second-order effects
The decision raises the burden on the SEC to apply a consistent rationale across comparable bitcoin exchange-traded products, affecting other applicants awaiting decisions.
Exchanges and product issuers gain a clearer basis to challenge uneven regulatory treatment, making court review a more consequential part of crypto-product approval strategy.
Third-order effects
If consistently applied, the ruling could narrow regulators’ discretion to distinguish closely related crypto investment products without a well-supported explanation.
The broader shift is toward crypto-market access being shaped jointly by agency rulemaking and judicial constraints, rather than by agency decisions alone.
The trend: This is one step in the institutionalization of crypto exposure through exchange-traded products, with courts increasingly testing the consistency of regulatory gatekeeping.
1/ Grayscale's victory over the SEC is *massive.* It's very rare for a federal circuit court to find that an agency has violated the APA by acting arbitrarily and capriciously. The DC Circuit just delivered a huge embarrassment for the SEC. But the ETF isn't approved yet 🧵
BREAKING: There it is, @Grayscale wins their lawsuit against the SEC. DC Circuit court of appeals is vacating SEC's denial of $GBTC's conversion into an ETF. [image]
SEC Chair @GaryGensler's crusade against the digital asset ecosystem is falling apart under scrutiny from the courts. This is yet another example of why a comprehensive regulatory framework, like the FIT for the 21st Century Act, must be made law. https://www.coindesk.com/...
1/2 The full decision is a slaughterfest of the SEC arguments, and requires a full review of Grayscale's application. SEC options from here on out are: 1. Delay decision and come up with new fake reason 2. Concede and approve 3. Request en banc appeal of the case. [image]
Grayscale just officially won their lawsuit against the SEC, allowing them to convert their futures #Bitcoin ETF into a spot ETF. The odds of other $BTC spot ETF approvals have now also significantly increased. This changes everything. Time to pay attention again.. 🍿 [image]
From @matt_levine's newsletter today covering Grayscale v. SEC. I think we all know it is really the latter, although not everyone needs to say that out loud. “One possible interpretation of this case is that the SEC's decision to block spot Bitcoin ETFs was unusually...
Nice win for crypto this morning out of the DC Circuit—a federal appeals court one step removed from SCOTUS—with a remarkably unanimous decision from an ideologically diverse panel. The 3 judges ruled the SEC failed to adequately explain its disparate treatment of one BTC ETF...
The D.C. Circuit Court of Appeals holds that the SEC acted in an arbitrary and capricious in denying Grayscale's proposed bitcoin fund. This is a hard standard to meet: it's the Court telling the SEC it had no basis for the decision & just made it up. https://www.docdroid.net/...