The U.S. Court of Appeals for the D.C. Circuit ordered the Securities and Exchange Commission (SEC) to reconsider Grayscale Investments’ application for a spot Bitcoin ETF.

This decision stems from the court’s previous judgment, emphasizing the similarities between Grayscale’s proposal and the Bitcoin futures ETFs that have already been approved.

The court concluded that Grayscale’s product is deserving of approval due to its comparable ability to detect market misconduct.

Following the SEC’s recent decision not to contest the August ruling, the court’s formal directive, a customary procedural step, was anticipated.

In addition, this event prompted Grayscale to submit a revised filing to convert its flagship GBTC fund into a full-fledged ETF.

Court Approves Grayscale’s Bitcoin ETF Application

The mandate strengthens Grayscale’s claim that its proposed Bitcoin ETF parallels the characteristics of approved Bitcoin futures ETFs; thus, it should not be subject to undue obstacles.

Significantly, the company resubmitted its application using an expedited S-3 filing instead of the standard S-1 procedure for new share offerings.

In addition, Grayscale intends to list its shares on NYSE Arca, pending approval of its current submissions, which will require a distinct filing for NYSE Arca.

Despite the court’s directive, the SEC’s subsequent actions remain unclear.

The regulatory body retains the authority to discover new grounds for rejection, thereby keeping market participants on their toes.

Major Organizations Seek SEC ETF Approval

Grayscale is not in pursuit alone. Other industry titans, such as BlackRock and Fidelity, have entered the fray, seeking the SEC’s approval to participate in Bitcoin ETFs.

Gary Gensler, chairman of the SEC, acknowledged the agency’s receipt of multiple filings but declined to comment specifically on Grayscale’s case.

Meanwhile, he described the rigorous review procedure for proposals, similar to that for public offerings, demonstrating the agency’s commitment to comprehensive evaluation.

This influx of proposals suggests a growing demand for such financial products.

However, this also necessitates that the SEC navigate a complex landscape of applications while maintaining a balance between market innovation and consumer protection.