Judge Deems Order ‘Arbitrary and Capricious

The U.S. Securities and Exchange Commission has faced another setback after its recent loss against Ripple in its lawsuit. The SEC has lost a case in the DC Circuit Court concerning SPIKES futures, with the court ruling that the SEC’s order was deemed “arbitrary and capricious.”

This legal language is similar to that used by Grayscale in their own lawsuit. This particular legal battle holds significant importance as it raises questions about the SEC’s ability to lose cases and highlights concerns about the soundness of its recent decisions.

Lawyer James Murphy, also known as MetaLaw Man, has recently shared his insights on this matter through a tweet. Let’s delve into detail. 

US SEC Faces Setback as Judge Rules Order ‘Arbitrary and Capricious’ 

Lawyer and Crypto Influencer James Murphy, also known as MetaLaw Man, recently shared his insights about the US SEC’s recent loss. He has explained that a three-judge panel from the D.C. Circuit invalidated an SEC order, citing it as “arbitrary and capricious.” Interestingly, two of these three judges are currently involved in considering Grayscale’s case. Grayscale aims to challenge the SEC’s denial of their bid to convert GBTC to a spot Bitcoin ETF.

Notably, Chief Judge Sri Srinivasan serves on both panels. It is worth mentioning that Judge Srinivasan was once on President Obama’s shortlist as a potential appointment to the U.S. Supreme Court. This information indicates the significance of the ongoing legal matters and the potential implications they may have on the SEC’s decisions and the cryptocurrency industry.

According to a report by Bloomberg, the D.C. Circuit has ruled that the SEC’s decision to exempt specific stock volatility futures from certain regulations, enabling them to compete with another index, was found to be unjust and without a reasonable basis. The court held that the decision lacked proper justification and appeared to have been made hastily without sufficient thought or valid reasons.

What’s Next For Grayscale?

The court ruling in the Grayscale case holds importance for entities seeking to issue spot Bitcoin ETFs within the United States. If Grayscale wins, the SEC may choose to challenge the decision in a higher court.

However, if Grayscale losses, the company could opt for an uncommon “en banc” hearing, wherein all judges of the D.C. Circuit will collectively assess the case. Alternatively, Grayscale may decide to appeal the ruling directly to the Supreme Court. The impending outcome could reshape the landscape of spot Bitcoin ETFs in the country.



https://coinpedia.org/news/u-s-sec-suffers-another-setback-as-judge-deems-order-arbitrary-and-capricious/

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