SEC Faces Midnight Deadline to Appeal Court Ruling on Grayscale Bitcoin ETF

cryptonews.com:

As the clock approaches midnight Eastern Time today, the U.S. Securities and Exchange Commission (SEC) faces an important deadline to appeal a court order regarding Grayscale Investments' Bitcoin ETF application. 

If the SEC takes no further action, Grayscale's application for converting its Bitcoin Trust (GBTC) into a Bitcoin exchange-traded fund (ETF) will automatically revive.

45 days ago, the D.C. Circuit Court of Appeals issued a strongly worded ruling against the SEC's initial rejection of Grayscale's application. 

The court described the regulatory body's decision as "arbitrary and capricious," criticizing the SEC for treating spot Bitcoin ETFs differently from futures-based ETFs. The prevailing sentiment among industry experts is that the SEC will likely let the deadline pass, given the court's unambiguous stance.

While the SEC's next move is highly anticipated, the agency still holds the cards. Legally, the SEC has the authority to prolong the dispute by finding other faults with Grayscale's application. This leaves the door open for further regulatory wrangling, potentially delaying the introduction of a mainstream Bitcoin investment product.

Grayscale initially submitted its application to convert its GBTC, currently managing around $17 billion in assets, into a spot Bitcoin ETF in October 2021. However, Grayscale is not alone in this endeavor. Other financial giants like BlackRock and Fidelity are also awaiting the SEC's decision on their respective Bitcoin ETF applications. 

"GBTC remains operationally ready to convert to an ETF upon appropriate regulatory approvals," said Jennifer Rosenthal, a spokeswoman for Grayscale, last Friday.

The SEC's decision will have a broad impact on market dynamics and investor