With a 45-day window for the SEC to seek a rehearing, and the appellate panel’s unanimous verdict, Peter Shea of K&L Gates LLP raises a salient point, “Going en banc would be a gamble without a clear majority.”
Grayscale SEC Ruling : What Lies Ahead?
The imminent mandate post the 45-day period is the next milestone. Grayscale’s Chief Legal Officer, Craig Salm, remains on tenterhooks, “Only once the dust settles will we truly discern the SEC’s stance on the ETF topic.”
Potential outcomes could span from immediate listing of Grayscale’s product to demanding further rationale for its previous denial. But the real novelty lies in the case’s uniqueness. As Salm points out, “It’s groundbreaking – merging a novel asset class with the inception of ETFs. No other case compares.”
Drawing parallels to the initial review, Grayscale’s proposal took the traditional route of a 19b-4 form submission via NYSE Arca. The lengthy history of the SEC dragging its feet on bitcoin ETF proposals paints a vivid picture of uncertainty. However, the idea of redoing the entire 19b-4 process feels redundant to experts like Blass. The question remains, “Where do we go from here?”
The Road to Exchange Listing
At the crux of Grayscale’s appeal lies the SEC’s varying treatments of ETFs with bitcoin futures and spot bitcoin. Grayscale’s win on the argument showcases the negligible differences between the two markets. With futures pricing based on spot activity, Grayscale argues that if one is safe, so is the other. This was a sentiment echoed by the D.C. Circuit panel, highlighting the symbiotic relationship between the two markets.
