The crypto community received the decision it had been hoping for when the District of Columbia Circuit Court of Appeals ruled on Grayscale Investments’ Bitcoin spot ETF application. The United States Securities and Exchange Commission (SEC) rejection of the application was overturned.
The decision was “a slaughterfest of the SEC arguments,” Cinneamhain Ventures founder Adam Cochran said on X (formerly Twitter). “This changes everything. Time to pay attention again,” influencer Miles Deutscher chimed in.
The initial enthusiasm was tempered by the understanding that the decision was limited in its scope and the SEC has options for its next steps. Grayscale released a statement in which chief legal officer Craig Salm said:
“We appreciate that the D.C. Circuit’s opinion acknowledged that this case presented a straight-forward question about equal treatment under the law.”
This more sober evaluation gained traction as analysts considered the SEC’s resourcefulness further.
“Gary Gensler and team are discussing how this can [be] made into a political win. […] Will Gensler graciously accept defeat or talk about how these 3 judges got it wrong?” crypto lawyer John Deaton asked.
Blockchain Association chief policy officer Jake Chervinsky acknowledged the possibility that the SEC would accept defeat, calling that strategy “a face-saving narrative” and “the right move” after “a huge embarrassment.”
1/ Grayscale’s victory over the SEC is *massive.*
It’s very rare for a federal circuit court to find that an agency has violated the APA by acting arbitrarily and capriciously.
The DC Circuit just delivered a huge embarrassment for the SEC.
Others were less optimistic. “So far, every time they lose in court they just shamelessly say the judge got it wrong and pursue more shenanigans,” Delphi Labs general counsel Gabriel Shapiro said.
if a court finds that the government acted arbitrarily and capriciously it should have to pay the other side’s legal fees — if not, there’s no consequence for bad government behavior.
Shenanigans can be costly. “For many companies, fighting back is incredibly expensive (you will win, but you’ll be bankrupt when you do) or you’re a financial conglomerate where the SEC can fuck up the rest of your business in the meantime. Gangster behavior,” Zero Knowledge Consulting managing partner Austin Campbell said.
Live view of Garbitrary Gensler’s office reading the court order that absolutely demolishes the SEC’s efforts to defraud retail investors: pic.twitter.com/TfU1l5CLeV
Crypto lawyer Jeremy Hogan reminded the community to beware of what it prays for. “Everyone, welcome ‘Big Money’ to the table. For better, or worse,” he said of the Grayscale win.
France became the first G7 country to announce the move last week – while Ireland, Spain and Norway all officially recognised a Palestinian state last year.
Please use Chrome browser for a more accessible video player
3:49
‘The war changed me’
Mr Carney told reporters in Ontario that Canada would do the same on certain conditions – including that the Palestinian Authority commits to fundamentally reforming its governance, and holds general elections in 2026 in which Hamas can play no part.
The Canadian prime minister said he had spoken with Mahmoud Abbas, the president of the Palestinian Authority, earlier in the day.
Following the announcement, the Israeli foreign ministry said in a statement: “The change in the position of the Canadian government at this time is a reward for Hamas and harms the efforts to achieve a ceasefire in Gaza and a framework for the release of the hostages.”
A White House official anonymously told Reuters that US President Donald Trump also believes he would be “rewarding Hamas” if he recognises a Palestinian state and therefore doesn’t plan to do so.
“President Trump’s focus is on getting people fed,” the official added.
Please use Chrome browser for a more accessible video player
1:02
What do Israelis think of UK’s plan to recognise Palestine?
Canada had long stated it would only recognise a Palestinian state at the conclusion of peace talks with Israel.
However, Mr Carney said the reality on the ground – including the starvation of citizens in Gaza – means “the prospect of a Palestinian state is literally receding before our eyes”.
He added: “We are working ourselves, with others, to preserve the possibility of a two-state solution, to not allow the facts on the ground, deaths on the ground, the settlements on the ground, the expropriations on the ground, to get to such an extent that this is not possible.”
The Canadian prime minister also said he “condemns the fact Israel has allowed a catastrophe to unfold in Gaza”.
Image: Palestinians carry aid supplies that entered Gaza through Israel, in Beit Lahia in the northern Gaza Strip. Pic: Reuters
Sir Keir Starmer announced the UK could recognise a Palestinian state after he had a meeting with Mr Trump the previous day.
Sir Keir said the conditions Israel would have to meet to avoid such a move included taking substantive steps to end the “appalling situation in Gaza”, and agreeing to a ceasefire.
Some 38 members of the House of Lords, including some of the UK’s most eminent lawyers, have since written to the attorney general to say that recognising a Palestinian state could be a breach of international law, The Times has reported.
They have said the territory may not meet the criteria for statehood under the Montevideo Convention, a treaty signed in 1933.
Please use Chrome browser for a more accessible video player
0:48
Aid dropped into Gaza amid international pressure
Meanwhile, a Downing Street spokesperson confirmed Sir Keir had spoken to Mr Carney over the phone on Tuesday.
The spokesperson said: “They discussed the grave situation in the Middle East and last night’s action by the United States to tackle the severe threat posed by Iran’s nuclear programme.
“Both reiterated their support for a diplomatic solution and agreed that Iran must come back to the negotiating table with the United States as soon as possible.
“They looked forward to continuing their discussions at NATO this week.”
Follow the World
Listen to The World with Richard Engel and Yalda Hakim every Wednesday
A global hunger monitor has warned that a worst-case scenario of famine is unfolding in Gaza.
The Hamas-run health ministry reported seven more hunger-related deaths on Wednesday, including a two-year-old girl with an existing health condition.
Meanwhile, at least 48 Palestinians were killed and dozens were wounded while waiting for food at the Zikim Crossing, the main entry point for humanitarian aid to northern Gaza, according to the Shifa Hospital that received the casualties.
It was not immediately clear who opened fire and there was no immediate comment from the Israeli military, which controls the crossing.
Please use Chrome browser for a more accessible video player
0:15
Footage shows young girl in Gaza mourning family
Israeli strikes and gunfire had earlier killed at least 46 Palestinians overnight and into Wednesday, most of them among crowds seeking food, health officials said.
The Israeli military did not immediately comment on any of the strikes. It says it only targets militants and blames civilian deaths on Hamas, because the group’s militants operate in densely populated areas.
US special envoy Steve Witkoff will travel to Israel on Thursday to discuss the next steps to address the situation in Gaza, an American official said.