Bloomberg Law Game Changing Decision for Crypto
Aug 30, 2023
Anthony Sabino, professor at St. John’s University’s Tobin College of Business and partner at Sabino & Sabino, discusses the game changing federal appellate court decision for the crypto industry. They analyze the court's decision, SEC chair Gary Gensler's criticisms, and the tensions between regulated and unregulated markets. They also explore the potential appeal by the SEC and the importance of market surveillance in preventing fraud and manipulation. The podcast dives into a recent court decision in the Southern District of New York and its impact on regulatory frameworks, involving notable figures like Judge Rakoff and Gary Gensler.
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Court Finds SEC's Denial Arbitrary
- The D.C. Circuit Court ruled that the SEC acted arbitrarily and capriciously in denying Grayscale's spot Bitcoin ETF.
- The court noted inconsistencies since the SEC approved Bitcoin futures products but rejected the spot Bitcoin product without sufficient basis.
Court Focuses on Regulatory Consistency
- The court did not criticize SEC Chair Gary Gensler's crypto policies but focused on procedural fairness.
- The SEC must treat similar crypto products consistently, ensuring rational and reasoned regulatory decisions based on statute.
Guide for Crypto Product Approval
- Crypto firms should study the DC Circuit opinion to understand required safeguards against fraud and manipulation.
- Demonstrating robust market surveillance and prevention measures is critical for SEC approval of crypto investment products.