Grayscale Goes Up by 10% After Winning Its Battle Against the SEC

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Grayscale is a digital asset manager that has been embroiled in a legal battle against the SEC for a while now. The reason was insane. Last year, the company requested approval from the US Securities and Exchange Commission to convert its biggest product—the Grayscale Bitcoin Trust or GBTC—to an exchange traded fund. The request was not granted by the SEC, and Grayscale decided to takes things to court.

It took a while, but when both sides presented oral arguments, Grayscale scored a win according to experts. As a result, the GBTC premium went up by 10%. But, this isn’t just a big win for Grayscale. It’s a win for the crypto market in general against the SEC, a controversial regulator that uses force instead of sane arguments to punish crypto companies it doesn’t like.

An Impressive Win

When Grayscale entered into a fight with the SEC, many suggested against it. Experts believed its pointless to fight the ruthless regulator, but Grayscale was sure it had the higher ground. It filed a lawsuit against the Commission, and both sides just recently presented oral arguments.

James Seyffart, Bloomberg’s Intelligence, commented on the arguments presented at the hearing. The judge’s reaction to SEC’s arguments were surprising, to say the least. Everyone including Seyffart believed that the judges (who are anti-crypto) will side with the SEC. The sole Republican judge was to side with Grayscale. But, to everyone’s surprise, all three judges were critical of the SEC.

The Commissions legal representatives made a key mistake. He used a lot of ambiguous legal lingo which the judges didn’t like. They questioned the language when he tried to reference the difference between spot market regulations and futures regulations. He also said that the Bitcoin market is manipulated, which brought discontent in the court. That might have been the SEC’s biggest mistake. As of now, there are no legal grounds in the US legal system to deny Bitcoin spot ETFs, even if the SEC says otherwise.

What Happens Now?

Grayscale can celebrate its win for a day or two before going back to work. No one expects the SEC to sit idle on this one. Even with judges double-teaming the Commission on many points during the oral argument, the digital asset manager should watch its back. One thing everyone can agree on about the watchdog is that it’s heavily anti-crypto and not willing to let the market flow.

The Grayscale premium is up by 10% and it’s all because the judges hinted at a favorable outcome. Many other firms are looking to launch a Bitcoin EFT, and they’ll definitely look to do it now. The regulator can fight back, but considering how the recent case went, things aren’t looking great for its arguments.

It’s a big win for everyone including crypto fans. When a judge goes against the SEC, it shows that the watchdog was never right about anything. There are some things you can’t go against, and the will of the people—in this case about cryptocurrencies—is high atop that list.

March 8, 2023: • No Comments

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