This Month in Crypto: Grayscale Emerges Victorious for Bitcoin ETF Review
Grayscale Victorious in SEC Lawsuit, Securing Bitcoin ETF Review
Crypto asset manager Grayscale Investments has achieved a significant win against the United States Securities and Exchange Commission (SEC) in its pursuit of converting the Grayscale Bitcoin Trust (GBTC) into a listed Bitcoin exchange-traded fund (ETF). The SEC previously rejected this conversion citing concerns over fraudulent and manipulative practices. Following the rejection, Grayscale filed a lawsuit, and the decision has now been overturned by the U.S. Court of Appeals Circuit Judge Neomi Rao.
Judge Rao granted Grayscale’s petition for review, vacating the SEC’s denial of the GBTC listing application. This development, however, doesn’t guarantee the immediate listing of a Grayscale Bitcoin ETF. Grayscale’s CEO, Michael Sonnenshein, stated that their legal team is actively reviewing the court opinion.
Grayscale’s GBTC, valued at over AUD $21.5 billion, is the largest Bitcoin fund traded over-the-counter.
The court’s decision requires the SEC to review the application again. The SEC still has the option to appeal the judge’s opinion within 45 days. The prospect of a Bitcoin ETF has been eagerly anticipated by the cryptocurrency industry as a potential pathway to mainstream institutional adoption. While the court ruling is a significant step, it doesn’t ensure automatic approval of the Bitcoin ETF application, but it does clear a significant legal obstacle in Grayscale’s pursuit of this initiative.
Several firms have shown a growing interest in launching spot Bitcoin ETFs this year, with plans for listing on the Nasdaq (NDAQ.O) or CBOE Global Markets. Notable players in this endeavour include BlackRock (BLK.N), the world’s largest asset manager, as well as Fidelity, WisdomTree (WT.N), VanEck, Bitwise, and Invesco. These firms have submitted applications to the SEC in pursuit of their own Bitcoin ETFs. The recent court decision favouring Grayscale’s appeal against the SEC denial adds a new dynamic to this landscape, potentially influencing the regulatory environment and setting a precedent for these pending applications.
This case has broader implications for the crypto and asset management sectors, as it challenges the SEC’s stance on Bitcoin ETFs. The SEC has approved Bitcoin futures ETFs but has consistently rejected spot Bitcoin ETFs due to concerns about potential market manipulation. Grayscale’s argument revolves around its belief that the surveillance measures applied to Bitcoin futures ETFs should be sufficient for spot Bitcoin ETFs as well.
Crypto Retail Trading Receives Green Light in Hong Kong
Asian cryptocurrency exchange HashKey is set to offer Bitcoin (BTC) and Ether (ETH) trading services to retail customers in Hong Kong from August 28. This move comes after HashKey obtained regulatory clearance on August 3 to provide crypto trading services to retail investors. However, investors will be restricted to investing a maximum of 30% of their net worth in cryptocurrencies through the platform.
HashKey has become the first crypto exchange in Hong Kong to receive regulatory approval for retail crypto trading. The company’s regulatory upgrade encompasses Type 1 and Type 7 licenses granted by the Securities and Futures Commission (SFC). The Type 1 license allows HashKey to operate a virtual asset trading platform under the country’s securities laws, while the Type 7 license enables the exchange to offer automated trading services to both institutional and retail users. OSL, another crypto platform, also received regulatory approval to offer BTC and ETH retail trading services, bolstering Hong Kong’s position as a crypto-friendly jurisdiction.
HashKey aims to attract 500,000 to 1 million users globally by year-end and more than 10 million by 2025. The expansion aligns with Hong Kong’s efforts to create a crypto-friendly environment and develop its virtual asset industry.
Australian CBDC Pilot Reveals Potential for Complex Payments and Asset Tokenisation
The Reserve Bank of Australia has concluded its central bank digital currency (CBDC) pilot program, identifying four key areas that could benefit from the implementation of a CBDC. The pilot explored the potential of a digital dollar and found it particularly valuable in enabling intricate payments and asset tokenisation. The program highlighted scenarios where a CBDC wasn’t exclusively necessary to achieve the desired outcomes.
The report indicated that a tokenised CBDC could facilitate advanced payment arrangements currently unsupported by existing systems, enhancing financial innovation, private digital money sectors, and inclusivity in the digital economy. The pilot program involved 16 participating firms, with many emphasizing the CBDC’s potential to enable instantaneous and simultaneous transaction settlements.
While recognising potential benefits, the report acknowledged that similar advantages could be achieved through private tokenised bank deposits or asset-backed stablecoins. The pilot was structured as a legal claim on the Reserve Bank of Australia, sparking questions about its legal status and regulatory treatment. The report concluded that while a CBDC could enhance efficiency and resilience in Australian payments, further research is needed to fully comprehend its potential advantages.
More news stories circulating the block:
- Judge approves SEC’s request to appeal motion in Ripple Case
- PayPal Launches PYUSD stablecoin for payment convenience
- New Zealand Parliamentary Report cautions against rushed crypto regulation
- Crypto thefts exceed $180 Million by North Korean hackers in first half of 2023
- OpenSea manager convicted of insider trading receives 3-month prison sentence and $50K fine
- Anticipated SEC approval for Futures ETF on the horizon
- Yuga Labs withdraws support from OpenSea following the removal of royalty enforcement
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