The United States Securities and Exchange Commission (SEC) is staying true to its stance against the crypto industry with yet another blow to the sector. While many had hoped the SEC would finally approve a Spot Bitcoin ETF after the recent ruling in the Grayscale case, the SEC has decided to delay its decision for applications from BlackRock, VanEck, WiseOrigin, Invesco Galaxy, WisdomTree, Bitwise, and Valkyrie Digital Assets.

The decision gives the SEC more time to review the ETF applications, pushing the deadline for Bitwise to October 16, WisdomTree, Galaxy, and Wise Origin to October 17, and Valkyrie to October 19. The SEC maintains its tradition of extending deadlines whenever possible, being allocated a total of 240 days to review applications from the outset of its assessment.

Grayscale’s Important Win

Earlier this week the SEC suffered a significant setback when the U.S. District Court for the District of Columbia ruled the agency must reconsider its rejection of the Grayscale ETF application. The court said the SEC acted “arbitrary and capricious” in the unanimous ruling of the three Judge panel.

The court argued that the SEC failed to give clear reasons for the rejection and why it disagreed with Grayscale about the close correlation of Bitcoin spot and futures markets, saying: “The Commission’s unexplained discounting of the obvious financial and mathematical relationship between the spot and futures markets falls short of the standard for reasoned decisionmaking.”

Grayscale had applied to convert its GBTC Bitcoin trust into a Spot EFT but the agency denied the application on the grounds of what it called unanswered questions about market manipulation. The SEC must now review the application or appeal the ruling and file for an appeal. Even if it chooses to review, it can still reject the application on different grounds.

While the market had initially reacted with enthusiasm and Bitcoin gained 8%, these gains have since been wiped out. In fact, Bitcoin is down 0.38% week on week and trading currently at $40,193 (US$ 26,034) according to CoinMarketCap.

Crypto Sector Ready to Push Back

Despite the lack of significant price movement, John E. Deaton, a prominent lawyer and advocate for over 75,000 XRP holders in the SEC vs. Ripple case, said the win is very positive for the industry. He said: “It’s a massive win for Bitcoin, BTC miners, Coinbase, and the Crypto industry in general. Does it mean the Grayscale Spot ETF, along with the others, will be granted immediately? No. But a spot ETF is happening. The relevant question is whether it will in 2023?”

The Grayscale victory against the SEC aligns with an ongoing trend in the crypto sector, where the industry appears to be resisting regulatory overreach. Australian lawyer Bill Morgan commented on the recent partial win for Ripple and the outright win for Grayscale.

He pointed out that while the case SEC vs. Coinbase was still looming the outlook for Coinbase and the sector is good. He said: “The crypto industry will ultimately win the three big cases that count. It is now up by two. […] The SEC has had some wins mainly by settlement but by the end I expect it will have lost the trifecta that matters most.”

The post The SEC Delays 7 Bitcoin ETF Applications, Spurring Frustration appeared first on Crypto News Australia.

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Filed under: Bitcoin - @ September 1, 2023 3:14 am