The CEO of Grayscale Investments explains that the US Securities and Exchange Commission (SEC) could potentially violate the Administrative Procedure Act by not approving a bitcoin exchange-traded spot fund (ETF).
Spot Bitcoin ETF SEC Approval Is “a Matter of When, Not If”
The US Securities and Exchange Commission (SEC) has now approved not one, but two different structures of Bitcoin futures exchange-traded funds (ETFs). This has led to optimism in the crypto industry that securities regulators are closer to approving a spot Bitcoin ETF.
The first structure uses the Investment Company Act 1940 (40 Act). Most bitcoin futures ETFs proposed to date are filed under this law. The second uses the Securities Act 1933 (33 Act). The Teucrium Bitcoin Futures ETF was approved earlier this month using the latter structure.
Michael Sonnenshein, CEO of Grayscale Investments, told CNBC last week, “From the SEC’s perspective, there have been multiple protections that 40 Act products that are 33 [Securities Act of 1933] Products don’t have this, but these protections have never addressed the SEC’s concerns about the underlying Bitcoin market and the potential for fraud or manipulation.”
He continued, “The fact that they have now evolved their thinking and approved a 33 Act product with Teucrium really invalidates that argument and speaks to the connection between bitcoin futures and the underlying spot bitcoin markets known as futures -Add value to contracts. ” Sunshine said:
Indeed, if the SEC cannot look at two similar issues, the futures ETF and the spot ETF, through the same lens, then it is potential grounds for a violation of the Administrative Procedures Code.
The Administrative Procedure Act (VwfG) regulates the procedure according to which federal authorities develop and issue regulations.
Grayscale filed with the SEC on Oct. 19 last year to convert its flagship Bitcoin Trust (GBTC) into a Bitcoin ETF. GBTC is Grayscale’s largest product with nearly $26 billion in assets under management as of April 15. If approved by the SEC, GBTC will be listed on the New York Stock Exchange instead of OTCQX.
The company is awaiting feedback from the SEC in early July on whether the filing is approved. The CEO has indicated that filing a lawsuit with the SEC is a possible option the company will take if the agency doesn’t approve the GBTC conversion.
On the question of whether the SEC will approve a spot Bitcoin ETF, Sonnenshein emphasized:
It’s really a question of when, not if, in our opinion.
Do you think the SEC will approve a spot bitcoin ETF soon? Let us know in the comment section below.
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