A recent development has cast a shadow of doubt over the imminent approval of the pending Spot Bitcoin ETF applications by the Securities and Exchange Commission (SEC). In line with this, a legal expert has hinted at what could happen next if the SEC were to reject these applications.
Applicants To Sue SEC If Bitcoin ETF Gets Rejected
Lawyer and Web3 enthusiast James “MetaLawMan” Murphy mentioned in an X (formerly Twitter) post that the Spot Bitcoin ETF applicants would immediately sue the SEC if all applications were denied. He further suggested that the Commission would likely lose as the Court of Appeals would once again rule that the decision was “arbitrary and capricious.”
In Murphy’s opinion, the Commission has no justifiable reason to deny these applications. Alluding to the Grayscale case, the legal expert noted that the SEC had given every reason it could for denying the asset manager’s application and still lost. For this reason, he expects that the regulator will approve multiple applications by January 10.
The lawyer’s statement comes after the crypto community was thrown into a state of confusion following Matrixport’s report that the SEC would likely reject all proposals this month. This came following months of excitement that the Commission was more than likely going to approve a Spot Bitcoin ETF this month.
Meanwhile, Bloomberg Analyst Eric Balchunas reached out to Markus Thielen, Matrixport’s Head of Research, to get clarification on what they were basing their prediction on. In response, Thielen mentioned that his report wasn’t based on inside information from any issuer or the SEC themselves. He also failed to provide any convincing reason why he suddenly turned “bearish.”
No Cause For Alarm?
As shown by Thielen’s response, there is so far no evidence suggesting that the SEC is likely to reject all Spot Bitcoin ETF applications. Bloomberg Analysts James Seyffart and Eric Balchunas, who have for a long time maintained that there is a 90% chance of approval coming by January 10, reasserted their stance following the Matrixport report.
Citing FOX Business Journalist Eleanor Terrett, Seyffart mentioned that the SEC could be signaling to the issuers to expect approvals soon enough. In line with this, he still expects that this would happen between January 8 and 10.
He also provided an insight into when these funds could begin trading as he says the gap between approval orders and actual trading “will be measured in days” and not weeks.
Balchunas also echoed similar sentiments on his X platform. He noted how there have so far been multiple reports from persons with concrete information that an approval is imminent. He also reaffirmed their position that there is a 90% chance that the SEC will approve these Spot Bitcoin ETFs soon enough.