The U.S. Court of Appeals has delivered a major ruling on the Securities and Exchange Commission’s (SEC) decision to deny a bitcoin exchange-traded fund (ETF), finding the agency acted capriciously and arbitrarily. The court sided with Grayscale Investments in its pursuit to transition the Grayscale Bitcoin Trust (GBTC) into an ETF. The judges granted Grayscale’s petition for review, meaning the SEC will have to review Grayscale’s previously rejected ETF application and provide better reasons for denying it.
The court’s pro-ETF ruling and anti-SEC comments have been met with enthusiasm in the crypto community. The top U.S. securities regulator was found to have failed to adequately explain its argument and made unexplained calls. In particular, the SEC didn’t make a good enough case for approving some bitcoin-related exchange-traded products and not others.
The ruling is important for two reasons. Firstly, ETFs increase the number of people who can invest in crypto by providing a more traditional and regulated pathway. Secondly, it shows that the SEC is not the ultimate arbiter of crypto, as the U.S. court system and Congress can also offer legal interpretations.
Crypto allows people to map their desires onto the assets, said Bloomberg editor Tracy Alloway. And so crypto is cash-like, commodity money that resembles corporate equity; it’s a meme and movement and also a tool; it’s the interface for the next generation of the internet and backbone to ultramodern financial architecture; it’s for libertarians, progressives and the apolitical — crypto is a bundle of contradictions.