The United States Securities and Exchange Commission (SEC) has reportedly missed the deadline to contest a court decision that ruled against its rejection of Grayscale's spot bitcoin ETF application. As revealed by sources ahead of the deadline, the SEC had no plans to appeal this ruling, potentially setting up a review of the application.
SEC Did Not Contest Court Ruling on Grayscale's Spot Bitcoin ETF Application
Grayscale had proposed a conversion of its bitcoin trust (GBTC) into a spot bitcoin exchange-traded fund (ETF), an action that was denied by the SEC. The decision in favor of Grayscale came from the court, which the SEC had 45 days to appeal. As of now, the regulator has not filed any appeal.
Information from people familiar with the matter, obtained by Reuters and Bloomberg, revealed that the SEC had no intentions of appealing the late-August decision of the U.S. Court of Appeals for the District of Columbia Circuit. This decision had upturned the SEC's dismissal of Grayscale's proposal.
Grayscale's Argument Against SEC's Denial
Grayscale had contested the SEC's decision, arguing that the regulator had previously approved certain surveillance agreements to curb fraud in bitcoin futures ETFs. They maintained that a similar practice should apply to its spot bitcoin ETF, considering that both these fund types are dependent on bitcoin's price. The Circuit judge overseeing the Grayscale-SEC case deemed the SEC's denial as "arbitrary and capricious", citing the regulator's failure to justify the disparate handling of similar products.
Potential Benefits of a Spot Bitcoin ETF
A spot bitcoin ETF would allow investors to gain exposure to the leading cryptocurrency without owning it. The cryptocurrency industry and financial market players have been seeking regulatory approval for such offerings.
Although the SEC approved ETFs holding bitcoin futures in 2021, it has not yet given the green light to a spot bitcoin ETF. While it has rejected such proposals in the past, it has accepted several for review this year, including one from financial giant Blackrock.
SEC Delays Final Decision on Several Applications
However, the SEC has postponed its final verdict on a number of applications. In September, it put off its decisions on applications from Blackrock, Valkyrie, Bitwise, Invesco, Ark 21shares, Global X, and others. It had also deferred its judgement on seven funds, including Wisdomtree, Vaneck, and Fidelity, in late August. The SEC has until next year to make its final decision.
In Grayscale's case, the appeals court is expected to issue a mandate outlining how its decision should be implemented, which may involve instructing the SEC to reevaluate the company's application, as noted by Reuters. Bloomberg analyst James Seyffart suggested in a tweet that discussions between the applicant and the regulator should commence next week.
The Future of Spot Bitcoin ETFs in the US
The future of spot bitcoin ETFs in the United States remains a topic of discussion. The implications of the SEC's delayed appeal against the Grayscale ruling could significantly influence the trajectory of these investment vehicles.
Frequently Asked Questions
How to Open a Precious Metal IRA?
The first step is to decide if you want an Individual Retirement Account (IRA). To open the account, complete Form 8606. You will then need to complete Form 5204 in order to determine which type IRA you are eligible. This form should not be completed more than 60 days after the account is opened. Once this is done, you can start investing. You may also choose to contribute directly from your paycheck using payroll deduction.
For a Roth IRA you will need to complete Form 8903. Otherwise, it will be the same process as an ordinary IRA.
To be eligible for a precious metals IRA, you will need to meet certain requirements. You must be at least 18 years of age and have earned income to qualify for a precious metals IRA. Your annual earnings cannot exceed $110,000 ($220,000 if you are married and file jointly) for any tax year. Contributions must be made on a regular basis. These rules apply regardless of whether you are contributing directly to your paychecks or through your employer.
A precious metals IRA can be used to invest in palladium or platinum, gold, silver, palladium or rhodium. However, physical bullion will not be available for purchase. This means you can't trade shares of stock and bonds.
Your precious metals IRA may also be used to invest in precious-metal companies. This option may be offered by some IRA providers.
There are two main drawbacks to investing through an IRA in precious metallics. First, they don't have the same liquidity as stocks or bonds. This makes it harder to sell them when needed. They also don't pay dividends, like stocks and bonds. Therefore, you will lose more money than you gain over time.
How does a gold IRA work?
For people who are looking to invest in precious materials, Gold Ira account accounts provide tax-free investments.
Physical gold bullion coin can be purchased at any time. You don't have a retirement date to invest in gold.
An IRA allows you to keep your gold forever. Your gold holdings will not be subject to tax when you are gone.
Your gold will be passed on to your heirs, without you having to pay capital gains taxes. Because your gold doesn't belong to the estate, it's not necessary to include it on your final estate plan.
You'll first have to set up an individual retirement account (IRA) to open a gold IRA. After you have done this, an IRA custodian will be assigned to you. This company acts in the role of a middleman between your IRS agent and you.
Your gold IRA custodian will handle the paperwork and submit the necessary forms to the IRS. This includes filing annual returns.
After you have established your gold IRA you will be able purchase gold bullion coin. The minimum deposit is $1,000. However, you'll receive a higher interest rate if you put in more.
Taxes will apply to gold that you take out of an IRA. You will be liable for income taxes and penalties if you take the entire amount.
Even if your contribution is small, you might not have to pay any taxes. However, there are some exceptions. For example, taking out 30% or more of your total IRA assets, you'll owe federal income taxes plus a 20 percent penalty.
It is best to not take out more than 50% annually of your total IRA assets. Otherwise, you'll face steep financial consequences.
Who is the owner of the gold in a gold IRA
An individual who has gold is considered to be a “form of money” by the IRS and subject to taxation.
You must have at least $10,000 in gold and keep it for at most five years to qualify for this tax-free status.
Although gold can help to prevent inflation and price volatility, it's not sensible to have it if it's not going to be used.
You will need to declare the value of gold if you intend on selling it one day. This could impact how capital gains taxes you owe for cash investments.
A financial planner or accountant should be consulted to discuss your options.
What are the advantages of a gold IRA
An Individual Retirement Account (IRA) is the best way to put money towards retirement. It is tax-deferred until it's withdrawn. You have complete control over how much you take out each year. There are many types and types of IRAs. Some are more suitable for students who wish to save money for college. Some are for investors who seek higher returns. Roth IRAs permit individuals to contribute after the age 59 1/2. Any earnings earned at retirement are subject to tax. Once they start withdrawing money, however, the earnings aren’t subject to tax again. This account is a good option if you plan to retire early.
An IRA with a gold status is like any other IRA because you can put money into different asset classes. Unlike a regular IRA that requires you to pay taxes on the gains you make while you wait to access them, a gold IRA does not have to do this. For people who would rather invest than spend their money, gold IRA accounts are a good option.
You can also enjoy automatic withdrawals, which is another benefit of owning your gold through an IRA. It means that you don’t have to remember to make deposits every month. Direct debits could be set up to ensure you don't miss a single payment.
Finally, gold is one of the safest investment choices available today. Because it isn’t tied to any specific country, gold’s value tends to stay stable. Even in economic turmoil, gold prices tends to remain relatively stable. It is therefore a great choice for protecting your savings against inflation.
- If you accidentally make an improper transaction, the IRS will disallow it and count it as a withdrawal, so you would owe income tax on the item's value and, if you are younger than 59 ½, an additional 10% early withdrawal penalty. (forbes.com)
- Instead, the economy improved, stocks rebounded, and gold plunged, losing 28 percent of its value in 2013. (aarp.org)
- (Basically, if your GDP grows by 2%, you need miners to dig 2% more gold out of the ground every year to keep prices steady.) (smartasset.com)
- Gold is considered a collectible, and profits from a sale are taxed at a maximum rate of 28 percent. (aarp.org)
- If you take distributions before hitting 59.5, you'll owe a 10% penalty on the amount withdrawn. (lendedu.com)
- 7 U.S. Code SS7 – Designation boards of trade as contract market authorities
- 26 U.S. Code SS 408 – Individual retirement plans
Tips for Investing Gold
Investing in Gold is one of the most popular investment strategies worldwide. This is because there are many benefits if you choose to invest in gold. There are several options to invest in the gold. Some people buy physical gold coins, while others prefer investing in gold ETFs (Exchange Traded Funds).
You should consider some things before you decide to purchase any type of gold.
- First, find out if your country allows gold ownership. If you have permission to possess gold in your country, you can then proceed. Or, you might consider buying gold overseas.
- You should also know the type of gold coin that you desire. You can choose between yellow gold and white gold as well as rose gold.
- The third factor to consider is the price for gold. It is best to start small and work your way up. When purchasing gold, diversify your portfolio. Diversifying your portfolio includes stocks, bonds, mutual funds, real estate, commodities, and mutual funds.
- Lastly, you should never forget that gold prices change frequently. It is important to stay up-to-date with the latest trends.
By: Lubomir Tassev
Title: SEC Misses Deadline to Appeal Against Grayscale's Bitcoin ETF Ruling
Sourced From: news.bitcoin.com/deadline-for-sec-appeal-against-grayscales-spot-bitcoin-etf-ruling-expires/
Published Date: Sat, 14 Oct 2023 14:03:54 +0000