In the ever-evolving world of digital assets and law, Grayscale Investments, LLC (Grayscale) found itself at the pinnacle of a major decision by the Court of Appeals for the District of Columbia. On August 29, the court deemed the Securities and Exchange Commission’s (SEC) denial of Grayscale’s October 19, 2021, spot Bitcoin (BTC) exchange-traded fund (ETF) application “arbitrary and capricious” and vacated the agency’s decision. At the heart of the court of appeal’s ruling lies the Administrative Procedure Act (APA), the complex interplay between spot asset pricing and futures asset pricing, and the SEC’s current sentiment towards digital asset-based financial products.
