After the US Securities and Exchange Commission approved Teucrium’s Bitcoin ETF application, Grayscale highlighted that its Bitcoin spot ETF is no different. The regulator gave Teucrium the go-ahead earlier this month.
A Bitcoin futures ETF is distinguished by its filing under the Securities Exchange Act of 1933 than the Investment Company Act of 1940. James Seyffart, a Bloomberg Analyst, believes that filing an ETF application under the 1933 Act could bring about a Bitcoin spot ETF approval.
Davis Pol & Wardell, lawyers representing Grayscale, in a letter to SEC, stated that the Teucrium order confirms the fundamental point made in the firm’s November 29, 2021 letter. It said that when it comes to approving ETFs, there is no basis for treating spot Bitcoin products differently from Bitcoin futures products. The November 2021 letter challenges the notions of fraud and market manipulation offered by Gary Gensler – the SEC chair. It says the regulator has never been able to prove a difference between market manipulation risk in the futures market and the spot market.
The letter pointed out that the derivatives markets present additional opportunities for manipulation on top of spot markets. This is why the derivatives markets have an additional layer of federal regulation.
The SEC chair is not approving spot ETFs as he believes the Bitcoin markets are ripe for manipulation and abuse. Gensler said spot and futures-based Bitcoin products face exposure to the same underlying Bitcoin market. He highlighted that any fraud or manipulation in the underlying market will affect both products in the same way.