The District of Columbia Court of Appeals ruled that the SEC had erred in dismissing Grayscale’s proposed bitcoin ETF, marking a significant milestone in efforts to introduce such investment products. The SEC had consistently denied applications for spot bitcoin ETFs, citing concerns about investor protection. Grayscale argued that the SEC’s prior approval of surveillance agreements for bitcoin futures-based ETFs should also apply to its spot ETF. The court ruled that the SEC had arbitrarily denied Grayscale’s application without explaining the material differences. This ruling could have broader implications for other asset management firms with similar applications. The SEC’s decision not to appeal the ruling indicates an evolving regulatory landscape for cryptocurrencies. The approval of a spot bitcoin ETF could bridge the gap between traditional finance and the crypto market.
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