Approval of Teucrium’s Bitcoin ETF futures-based provides a basis for a similar decision on Grayscale’s application to convert GBTC into an exchange-traded fund. The company said this in a letter to SEC, The Block reports.
“There are no grounds for considering spot bitcoin products other than futures-based products based on them,” the document states.
In early April, the SEC approved Teucrium’s product. It conforms to the Securities Exchange Act of 1934 just as Grayscale’s filing does.
Earlier, SEC Chair Gary Gensler said that for possible approval of spot bitcoin ETFs, their underlying assets must be bitcoin futures on the CME.
Also he mentioned filings under the Investment Company Act of 1940. Subsequently, on that basis, the regulator allowed trading of futures-based Bitcoin ETFs from VanEck, Valkyrie Investments, and ProShares.
“The approval of Teucrium’s product confirms that the Investment Company Act of 1940 is not a basis for the Commission’s ruling. Any fraud or manipulation in the underlying market will affect both products — spot and futures Bitcoin ETFs — equally. The existence of these risks cannot be used as justification for denying approval of one product after approving the other,” Grayscale’s lawyers said.
Grayscale filed the application to convert the Bitcoin Trust into an ETF in October 2021. In February 2022, the SEC delayed its decision until July 6.
Earlier, the company said it was prepared to sue the regulator if GBTC’s conversion into a Bitcoin ETF was denied.
A Nasdaq-commissioned survey conducted in April showed that 72% of financial advisers surveyed approved investments in a spot Bitcoin ETF.
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