A US federal appeals court has sided with an asset manager in a lawsuit against the Securities and Exchange Commission after the regulator denied an application to convert the Grayscale Bitcoin Trust into an exchange-traded fund.
The news sent crypto prices surging on Tuesday, with Bitcoin gaining more than six per cent, pushing the $28,000 mark.
Grayscale and other asset managers, including BlackRock, WisdomTree and Fidelity, have pushed for the SEC to approve spot bitcoin ETFs, which would allow people to invest in the crypto without having to won it themselves..
Last year Grayscale sued, arguing that the SEC had already approved exchange traded products that hold bitcoin futures contracts.
Judge Neomi Rao has agreed, stating in the opinion: “The denial of Grayscale’s proposal was arbitrary and capricious because the Commission failed to explain its different treatment of similar products.”
Says an SEC statement: “We are reviewing the court’s decision to determine next steps,” the SEC said in a statement.
Jennifer Rosenthal, spokesperson for Grayscale, says: “This is a monumental step forward for American investors, the bitcoin ecosystem, and all those who have been advocating for bitcoin exposure through the added protections of the ETF wrapper.”