The United States may be very close to finally getting a Spot Bitcoin ETF, following the latest development, which marks yet another setback for the US Securities and Exchange Commission (SEC). In June 2022, the SEC rejected Grayscale’s application to convert its Grayscale Bitcoin Trust (GBTC) into a spot Bitcoin ETF.
Grayscale subsequently took the matter to court, and on Tuesday, the U.S. District Court for the District of Columbia issued a ruling that likely wasn’t what the SEC had hoped for. The court dismissed the SEC’s claim that Grayscale failed to address questions about how it would prevent market manipulation.
Stuart Alderoty, Ripple’s Chief Legal Officer, pointed out that the SEC is currently facing challenges in the courts. He said: “The SEC is getting battered in the court. In our case it’s been proven wrong, been called hypocritical, lacking faithful allegiance to the law, fined for discovery abuses and now another distinguished court saying it’s ‘arbitrary and capricious’ – that’s a really big deal.”
This follows Judge Torres’ ruling that XRP is not inherently a security. The SEC vs. Ripple case is awaiting a jury trial in 2024 and a decision from the Judge regarding the SEC’s motion for an interlocutory appeal.
The SEC is On Unfamiliar Grounds
However, Alderoty is not the only one pointing at the losing streak of the SEC. The agency is used to its enforcement actions yielding fines from alleged companies, but numerous crypto firms, Ripple included, have chosen to contest these actions.
Another significant case within the crypto sector involves SEC vs. Coinbase, awaiting a consequential decision. In June, the SEC filed a lawsuit against Coinbase for allegedly acting as an unregistered broker, clearinghouse and exchange. Coinbase sought the complete dismissal of the lawsuit, arguing that it doesn’t engage in trading securities and, therefore, falls beyond the SEC’s jurisdiction.
While this decision is still pending, lawyer Bill Morgan was optimistic and said: “The SEC has had some wins mainly by settlement but by the end I expect it will have lost the trifecta that matters most.”
Is A Bitcoin ETF Certain Now?
Grayscale’s win does not mean a spot Bitcoin ETF will be approved; the Judge only ordered the SEC to review its decision. But as Lawyer John E. Deaton has put it: “It’s a massive win for Bitcoin, BTC miners, Coinbase, and the Crypto industry in general. Does it mean the Grayscale Spot ETF, along with the others, will be granted immediately? No. But a spot ETF is happening. The relevant question is whether it will in 2023?”
Following the decision, Bitcoin temporarily rallied past $28,000 but has retracted since then and currently trades at $25,807 as per CoinMarketCap.