The US SEC has approved a future ETF under the non-usual act that creates an environment of possibilities for spot Bitcoin ETF
US regulatory authority Security and Exchange Commission has announced its approval of an Exchange-traded Fund or ETF. The announcement was made on the authority’s official website, and it also mentioned adding Teucrium to its approved bitcoin futures ETF issuers list. The regulator’s approach seems different from its usual take on such activities.
As far as Teucrium is concerned, it has filed its application under the Securities Act of 1933 with a 19b-4 form rather than going with the usual approach of filing under the Investment Company Act of 1940 like Previous Bitcoin Futures ETF applications did.
Till the time the filing under this Investment Company Act seemed to be the preferred method of the SEC. As SEC chair Gary Gensler has researched the advantages numerous times it brings to investors compared to the Securities Act. The SEC approved the first Bitcoin futures ETFs last October using the same mechanism.
Several analysts put that as the SEC is approving a bitcoin futures ETF according to the 1933 law, the agency could be seen as going somewhat against its previous arguments that it had made regarding the approval of an ETF based on bitcoin. Nate Geraci of the ETF Store stated that the SEC had said previously that 40 Act funds are used to provide additional protections to investors. The SEC could have just killed or destroyed its argument on the same form with the approval of Teucrium ETF.
James Syffart from Bloomberg Intelligence, considering this could be the first step to enable a spot bitcoin ETF, stated that Gensler initially has approved Bitcoin futures ETF according to 1940 Act protections by saying that they are better than products of 1933 Acts. But this one here is the futures ETF, a product of the 1933 Act. This act strengthens the spot bitcoin ETF’s case that goes through the same process.
The decision of Teucrium also highlights the campaign of Grayscale Investment LLC, a long-awaited campaign, to convert its Grayscale Bitcoin Trust worth $28 billion into a physically-backed ETF. Citing several delays, the CEO of Grayscale, Michael Sonnenschein, said that if the applications got rejected this time, all the options are on the table regarding different approaches, including a potential possibility of a lawsuit. The SEC is yet to make a final ruling on the applications until 6th July.
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Source: https://www.thecoinrepublic.com/2022/04/09/why-does-secs-approval-seem-to-break-its-own-notion-regarding-etfs/