Grayscale Investments CEO Michael Sonnenshein, in an interview with CNBC, expressed optimism about the potential approval by the U.S. Securities and Exchange Commission (SEC) of a spot Bitcoin ETF.
At the beginning of April, the regulator allowed the launch of an exchange-traded fund based on futures on the first cryptocurrency from Teucrium. The filing complied with the provisions of the Securities Act of 1933, and not the Investment Company Act of 1940.
Earlier, SEC Chair Gary Gensler stated that it is the latter document that provides more robust investor protections.
From the SEC’s point of view, products under the 40 Act had several protections that do not exist for products under the 33 Act. But these funds never addressed the Commission’s concerns about Bitcoin and the possibility of fraud or manipulation,
According to him, some of the protective measures include an independent board, accounting and custody rules.
In our view, the question is when, not if. If the SEC cannot treat two identical questions — a futures ETF and a spot ETF — through the same lens, then this, in effect, constitutes a potential violation of the Administrative Procedure Act,
The SEC has not yet approved any application for a spot Bitcoin ETF. Meanwhile, the agency allowed the launch of futures-based ETFs on the first cryptocurrency from VanEck, Valkyrie Investments and ProShares.
Grayscale Investments said the conversion of the Bitcoin trust into an ETF is the top priority. The company filed the corresponding application with the regulator in October 2021. In February 2022, the SEC delayed its decision.
The company suggested that the Commission may have violated the law when approving futures-based Bitcoin ETFs, and said it was prepared to sue the agency if the transformation of GBTC into an ETF is denied.
Most Nasdaq financial advisers surveyed approved investments in spot crypto ETFs.
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