Teucrium Expects SEC’s Ruling On Bitcoin Futures ETF This Week: Could Result In Implications On Spot Funds

The Securities and Exchange Commission is likely to rule on a bitcoin futures ETF this week. The ETF is proposed by fund group Teuricum and the decision of the commission could have significance for proposed spot Bitcoin funds.

The decision on the Teucrium Bitcoin Futures Fund was delayed by the SEC in January. The agency pushed the decision on the product by April 8.

As per the Bloomberg Intelligence Analysts, the decision of the agency on the Teucrium fund “could expose the agency to rulemaking violations and strengthen arguments for spot ETFs,”

Meanwhile, following the SEC’s approval in October, Valkyrie Investments and ProShares launched bitcoin ETFs. Those funds were filed under the Investment Company Act of 1940 and do not have to follow the 19b-4 process, James Seyffart, Bloomberg Intelligence ETF, in an interview during ETF Prime podcast on Jan. 4, revealed that the burden on the applicant the reduce the concerns of Division of Trading and Markets SEC.

However, the Teucrium Bitcoin Futures Fund (BCFU) was filed under the same regulation as Bitcoin ETFs ~ the Securities Act of 1933. Over the recent months, the SEC has denied the spot bitcoin ETFs, noting that there is an absence of surveillance and runs the risk of manipulation.

In a research note, Eric Balchunas, Seyffart and Bloomberg Intelligence analyst, said that the previous stance of SEC might have signified that the agency would deny Teucrium’s fund but it is not likely now since rejections can make the agency vulnerable to Administrative Procedure Act violations.

On the other hand, if Teucrium’s funds got the approval, it will be quite difficult for the SEC to explain why the CME bitcoin futures market isn’t of notable size but is apt for ETFs.

In August, Gary Gensler, chairperson at SEC said that “significant investor protections” are provided under the Investment Company Act of 1940.

While, in a letter to the SEC, a VedderPrice lawyer representing Teucrium. Thomas Conner stated that according to Teucrium, the 1933 Act does offer “appropriate investor protections such that disparate regulatory treatment of BCFU versus bitcoin ETFs is not justified,”

Last month, in a research note Seyffart and Balchunas revealed that they don’t anticipate the SEC’s approval of a spot bitcoin ETF until mid-2023.

According to a March 31 filing, recently the agency has rejected a Bitcoin ETF application from fund groups 21Shares and Ark Invest.

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Andrew is a blockchain developer who developed his interest in cryptocurrencies while his post-graduation. He is a keen observer of details and shares his passion for writing along with being a developer. His backend knowledge about blockchain helps him give a unique perspective to his writing