The opening opinion written by Judge Rao leaves little to the imagination about how the Court feels about the SEC’s decision denying Grayscale’s conversion:
In simpler terms? The SEC didn’t have a good reason for treating Grayscale’s proposal differently from similar products.
Consistency is Key
The Court didn’t mince words, stating, “It is a fundamental principle of administrative law that agencies must treat like cases alike.” This was a clear jab at the SEC’s seemingly inconsistent approach to Grayscale compared to similar products.
Translation: Hey, SEC, if it looks like a duck and quacks like a duck, it’s probably a duck. Stop calling it an alligator. 🐊
Arbitrary Much?
The Court declared, “The denial of Grayscale’s proposal was arbitrary and capricious because the Commission failed to explain its different treatment of similar products.” Ouch. That’s a direct call-out, emphasizing the lack of clarity in the SEC’s decision-making.
Translation: You can’t just say ‘no’ because you feel like it. It’s like denying someone ice cream because it’s cold. 🍦
Black Letter Law
Highlighting the importance of consistency, the Court reminded everyone that “the great principle that like cases must receive like treatment is … black-letter administrative law.” A not-so-subtle nudge to the SEC to get its act together.
Translation: You can’t give one kid candy and the other a bag of dirt for the same good behavior. That’s just mean. 🍬
The Height of Inconsistency
In a rather scathing remark, the Court noted that “dissimilar treatment of evidently identical cases” is the “quintessence of arbitrariness and caprice.” Talk about throwing shade.
Translation: You can’t deny this Fuji Apple is an apple and deny it a spot in the Apple Basket just because you’ve decided to call it a pumpkin. 🎃
Predictability Matters
The Court emphasized the need for agencies to offer “predictability and intelligibility” in their actions. This isn’t just about fairness; it’s about ensuring that judicial reviews can be facilitated effectively.
Translation: Your choices are like handing someone near-sighted glasses meant for someone far-sighted, then telling them to read in pitch black. 👓
Playing Fair on the Playground
Lastly, the Court hinted at potential “unfair discrimination,” by the SEC. Agencies, they pointed out, must avoid “unfair discrimination between customers, issuers, brokers, or dealers.”
Translation: The SEC picks their favorite child and gives them all the toys. Not cool.
You can read the full text here.