On Tuesday, the Court of Appeals for the D.C. Circuit granted Grayscale’s petition for review, vacating the SEC’s rejection of Grayscale’s application to convert its Bitcoin Trust into a spot ETF  – an exchange-traded fund that tracks the price of Bitcoin and gives buyers direct access to Bitcoin ownership. The court described the SEC’s treatment of Grayscale’s application as “arbitrary and capricious” for treating similarly situated products differently without explanation. The decision marks the latest in a string of crypto losses for the SEC, following Ripple’s victory over the SEC in July.

“Rather than setting clear rules of the road for crypto, Chairman Gensler has pursued one-off enforcement actions against digital asset companies and made up the law as he goes along,” said Chamber of Progress CEO Adam Kovacevich. “That strategy hasn’t held up in court. Today’s decision is a victory not only for Grayscale, but for everyone who wants to see fair treatment of digital assets under a clear legal framework.”

The SEC’s previous decision to reject Grayscale’s application dismissed supportive comments from consumers and industry leaders. Spot Bitcoin ETFs are already trading in Canada, Australia, Singapore, and Brazil. For the average investor, a spot Bitcoin ETF has the potential to serve as a low-risk, cost-effective on-ramp into the burgeoning crypto industry. 

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Chamber of Progress (progresschamber.org) is a center-left tech industry policy coalition promoting technology’s progressive future. We work to ensure that all Americans benefit from technological leaps, and that the tech industry operates responsibly and fairly.

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