The U.S. Securities and Exchange Commission (SEC) will not appeal a recent court ruling that found it was wrong to reject an application from Grayscale Investments to create a spot Bitcoin exchange-traded fund (ETF), according to a source familiar with the matter. The District of Columbia Court of Appeals in Washington ruled in August that the SEC was wrong to reject Grayscale’s proposed Bitcoin Etf, a decision closely watched by the industry. The SEC’s decision not to appeal clears the way for the agency to review Grayscale’s application. Grayscale did not immediately provide comment on the matter.

A spot bitcoin ETF would allow investors to gain exposure to the world’s largest cryptocurrency without actually owning it. The SEC has denied all spot bitcoin ETF applications, including Grayscale’s, citing concerns about investor protection from market manipulation. Grayscale argued that the SEC’s approval of surveillance agreements for bitcoin futures-based ETFs should also be sufficient for its spot ETF, as both types of funds rely on bitcoin’s price. The appeals court agreed, ruling that the SEC arbitrarily denied Grayscale’s application without explaining the material differences between the two arrangements. The court is expected to issue a mandate instructing the SEC to revisit Grayscale’s application.

Other asset managers, including BlackRock, Fidelity, and Invesco, have similar spot bitcoin ETF filings pending with the SEC. The SEC is expected to make decisions on those applications by next year. The SEC’s press office did not provide immediate comment on the matter.

Reporting by Chris Prentice and Hannah Lang; editing by Michelle Price and Rod Nickel.