SEC chair Gensler still reviewing Grayscale BTC ETF ruling

Securities and Exchange Commission Chair Gary Gensler informed legislators that he is currently examining a court ruling that granted Grayscale Investments a recent victory in its quest for approval of a Bitcoin exchange-traded fund (ETF).

During a Senate Banking Committee hearing on Tuesday, Senator Bill Hagerty of Tennessee inquired about the specific requirements the agency was looking for in a filing to greenlight a spot Bitcoin ETF.

“What questions do you still need to be answered from issuers about the market and/or market infrastructure in order to allow this to happen?” the lawmaker asked.

Gensler said his agency was still reviewing the Grayscale decision as well as “multiple filings around bitcoin exchange-traded products.”

A significant ruling

In August, a panel of three judges in the U.S. Court of Appeals for the D.C. Circuit mandated that the SEC must reevaluate Grayscale’s request for a spot Bitcoin ETF. This decision followed a lawsuit filed by the asset management company against the agency the previous year, subsequent to the rejection of its proposal to convert its flagship GBTC fund. The court specifically addressed the SEC’s disparate treatment of spot Bitcoin ETFs and similar funds based on futures contracts, which the regulator has sanctioned.

Gensler’s recent statement coincided with several firms, including BlackRock and Fidelity, submitting applications for spot Bitcoin ETFs. Some experts believe that the Grayscale Court ruling could sway the decision in their favour.

Last week, Grayscale reached out to the SEC, sending a letter requesting a meeting with the agency and urging it to grant approval for its spot Bitcoin ETF.

Lawyers for Grayscale said in the letter, “We hope you will agree that the best use of resources now is for the Commission to issue an order approving NYSE Arca’s Rule 19b-4 filing and authorize the staff to work with Grayscale and NYSE Arca to finalize the prompt listing of the trust’s shares.

The SEC retains the option to seek an en banc hearing, which entails a reexamination with the participation of all three judges. Once 45 days have elapsed, the court will issue a conclusive directive containing specific instructions for the next steps. Alternatively, the agency may pursue a review of the D.C. Circuit’s ruling in the Supreme Court.