Grayscale’s Victory: SEC Delays Decision on Bitcoin ETFs – Law Decoded

On August 29, Grayscale Investments achieved a significant victory against the U.S. Securities and Exchange Commission (SEC) in its quest to transform its over-the-counter Grayscale Trust (GBTC) into a publicly listed Bitcoin exchange-traded fund (ETF). U.S. Court of Appeals Circuit Judge Neomi Rao ruled in favor of Grayscale’s petition for review and vacated the SEC’s decision to deny the GBTC listing application. Previously, Judge Rao pointed out that the SEC failed to provide any justification for rejecting Grayscale’s application.

While the initial excitement within the crypto community was palpable, it was moderated by a recognition of the limitations inherent in the court’s ruling. Gabriel Shapiro, general counsel for Delphi Labs, remarked that despite facing losses in court, the SEC often continues to act without accountability. Austin Campbell, managing partner at Zero Knowledge Consulting, added that the financial burden of legal battles is substantial, noting that for many firms, winning a case against the SEC could lead to bankruptcy, or they might face repercussions that could threaten their entire business operations. This has led to concerns about the SEC’s conduct being referred to as “gangster behavior.”