The digital currency ecosystem was riled by the false update from Matrixport that the United States Securities and Exchange Commission (SEC) is likely to deny all spot Bitcoin ETF applications in contrary to popular beliefs this month. Should the market regulator choose to deny these applications, top crypto lawyer MetaLawMan has predicted the legal implications that will follow.
Spot Bitcoin ETF Denial Might Spark New Wave of Lawsuits
Known for his insights into crucial lawsuits in the industry, MetaLawMan said if the SEC risks denying the spot Bitcoin ETF applications from the likes of BlackRock, Grayscale Investments, and Ark 21Shares amongst others, it will likely get sued by the horde.
If the lawsuits are filed, MetaLawMan predicts that the D.C. Court of Appeals would again rule that the SEC was “arbitrary and capricious” in its verdict to the more than 12 Bitcoin ETF applicants. The legal veteran shared this position drawing on the precedent set in the lawsuit between the regulator and Grayscale Investments last year.
With the SEC initially denying the request made by Grayscale Investments to convert its Bitcoin Trust (GBTC) product to a full-fledged spot Bitcoin ETF product, the firm sued the regulator and eventually got favored by the court. The presiding Judge, Sri Srinivasan, and Judges Neomi Rao and Harry Edwards ordered the SEC to go back to the drawing board and review the Grayscale application again.
Surprisingly, the markets regulator refused to appeal the decision as of the deadline, meaning it aligned with the court’s ruling. Drawing on this, MetaLawMan said the SEC has given every reason it had for denying Grayscale and lost, and there is no indication it will want to trail that path again.
SEC’s Moves Are Promising
While the SEC, under the leadership of Gary Gensler has not issued any official statement regarding the spot Bitcoin ETF applications and the controversies in he ecosystem, its actions as it regards correspondence are proving to be promising.
In a recent update, the SEC is reportedly meeting with international exchanges including the New York Stock Exchange (NYSE) and the tech-heavy Nasdaq Composite among others over the proposed spot Bitcoin ETF product.
Until the next decision projected to come before midnight is announced, crypto proponents remain optimistic that the game-changing product will eventually get launched.
