Grayscale’s legal victory against the SEC in its bid for a spot Bitcoin ETF in the US marks a significant milestone with potential implications for the entire cryptocurrency industry.
Additionally, the SEC’s legal battles, particularly the SEC vs. Ripple case, are shaping the agency’s approach to crypto regulations.

Although there’s been some selling pressure in the market and the early excitement for an ‘Uptober’ has been waning away, investors have not lost all hope in this scenario. The current legal developments surrounding Ripple’s XRP case as well as the Grayscale’s conversion of GBTC to a spot Bitcoin ETF have put the US SEC on the backfoot.

Spot Bitcoin ETF Approval on the Cards

Grayscale’s legal victory against the US Securities and Exchange Commission (SEC) marks a crucial advancement in unlocking the potential of Bitcoin ETFs in the United States. The court’s reprimand of the SEC for its “capricious” and “arbitrary” rejection of Grayscale’s spot Bitcoin ETF application instills optimism among investors and cryptocurrency enthusiasts.

This ruling represents a substantial step toward the realization of the first-ever spot Bitcoin ETF in the US. Pavel Matveev, CEO at Wirex, emphasized the significance of this milestone for the cryptocurrency industry. Such an ETF would faithfully reflect Bitcoin’s actual market price, streamlining the investment process for both retail and institutional investors. Speaking to BeInCrypto, Mateev said:

“For everyday investors, a Bitcoin ETF could make investing in Bitcoin much simpler. They wouldn’t have to worry about buying and storing cryptocurrency directly. Big institutional investors might see the approval of a Bitcoin ETF as a signal that the cryptocurrency market is becoming more legitimate… This could influence the price and how the Bitcoin market works. This court decision could make more people interested in and involved with cryptocurrencies”.

On the other hand, applicants of spot Bitcoin ETF have been making necessary changes to cater to the SEC’s demand for the product. Earlier this week, Ark Invest updated its spot Bitcoin ETF filing making some necessary changes as per the SEC requirements. This shows that the chances of approval for the first spot Bitcoin ETF are growing further.

As an example, Eric Balchunas, Senior ETF Analyst at Bloomberg, expressed a 75% likelihood of approval, considering the ongoing interactions between the SEC and issuers of spot Bitcoin ETFs. If approved, it could lead to a massive influx of institutional funds in Bitcoin.

Altcoins to Resist SEC’s Securities Charges

The Grayscale ruling isn’t the sole legal battle influencing the SEC’s shift toward a crypto-friendly approach. The SEC vs. Ripple case, another example of courts scrutinizing the federal agency, introduced a more nuanced method for assessing whether crypto tokens should be classified as securities.

Pavel Matveev suggested that this development might add complexity to securities fraud allegations against token issuers, although it doesn’t entirely rule out such claims.

“The recent decision in the Ripple case distinguishes between big institutional investors and regular folks when it comes to whether selling a crypto token is seen as a securities deal. Legal experts think this ruling could make things tougher for people bringing class-action lawsuits in cases where they claim to have bought unregistered securities,” Matveev added.

There have also been discussions that alternative regulatory bosides such as the CFTC shall be taking greater role in crypto regulation. “The presence of alternative regulatory bodies like the CFTC could potentially shape the regulatory landscape for cryptocurrencies in the United States. This will greatly depend on the results of legislative efforts and the willingness of regulators to adapt to the evolving crypto market,” Matveev added.

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Filed under: Bitcoin - @ October 13, 2023 6:50 pm