January 12, 2024

Munger, Tolles & Olson’s Historic Appellate Victory Leads to Watershed Moment for Bitcoin Industry as SEC Approves First Spot Bitcoin Exchange-Traded Products

As a direct result of Munger, Tolles & Olson’s historic appellate victory at the U.S. Court of Appeals for the District of Columbia, the U.S. Securities and Exchange Commission (SEC) has approved the first U.S. spot bitcoin exchange-traded products (ETPs) in a watershed moment for the digital currency industry.

In August 2023, MTO secured a landmark appellate ruling for Grayscale Investments, LLC, sponsor of the world’s largest bitcoin investment fund, when the D.C. Circuit vacated an SEC order denying Grayscale’s bid to launch the first spot bitcoin ETP in the U.S. As a result, in an unprecedented reversal of its long-held practice of denying approval of such products, the SEC approved the first listing and trading of a number of spot bitcoin ETPs on January 10, 2024.

As news of the SEC’s decision reverberated globally, bitcoin stock prices rose and financial publications began predicting that bitcoin’s market capitalization could surge into the trillions of dollars in just a matter of years. Previously, those investing in bitcoin had to hold the bitcoin themselves and deal with inefficient transaction costs. Now, with the new spot bitcoin ETPs approved, investors will be able to invest in bitcoin simply by buying shares of ETPs that trade on stock exchanges.

In a public statement, SEC Chair Gary Gensler specifically cited the D.C. Circuit ruling as the impetus for the Commission’s decision to reverse its long-held practice of disapproving spot bitcoin ETPs. The MTO appellate team that secured the ruling was Don Verrilli, Elaine Goldenberg and Sarah Weiner.

The ruling garnered significant coverage in national news publications, including The Wall Street Journal, Forbes, The Washington Post, Reuters and Law360. Likewise, the SEC approval announcement received national coverage in publications such as The New York Times, CNBC, The Wall Street Journal, Forbes and many more.

About MTO’s Appellate Practice

Munger, Tolles & Olson’s appellate and Supreme Court practice is recognized as among the best in the nation and routinely handles the highest-stakes matters before the U.S. Supreme Court, U.S. courts of appeals, and state appellate courts. Our lawyers have secured victories in cases of historic importance and have won ground-breaking appeals around the country on a wide range of subjects, including antitrust, securities, intellectual property, cross-border disputes, and regulatory matters.

Learn more about our appellate practice.