Grayscale CEO Says That the SEC Should Have No Problem Approving A Spot Bitcoin ETF

By Bhushan Akolkar
April 18, 2022 Updated April 20, 2022
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SEC has disapproved of VanEck's Spot-based ETF, citing that the Bitcoin spot market is prone to "fraud and manipulation".

The demand for the spot Bitcoin ETF has been on the rise and some of the biggest industry veterans are pushing for it. The market is hopeful that the spot Bitcoin ETF should arrive this year itself in 2022 as the U.S. SEC gets comfortable with approving the Bitcoin Futures ETF.

Earlier this month, the SEC approved the Teucrium Bitcoin Futures ETF. Interestingly, this Futures ETF was filed under the Securities Act of 1933. However, other Bitcoin Futures ETFs approved over the last year have been approved under the Investment Company Act of 1940. Commenting on this new development, Grayscale Investments CEO Michael Sonnenshein said:

“From the SEC standpoint, there were several protections that 40 Act products have that 33 products don’t have, but never ever did those protections address the SEC’s concern over the underlying bitcoin market and the potential for fraud or manipulation.

So the fact that they’ve now evolved their thinking and approved a 33 Act product with Teucrium really invalidates that argument and talks to the linkage between the bitcoin futures and the underlying bitcoin spot markets that give the futures contracts their value.”

These protections include some accounting and custody rules, and an independent board.

SEC Should No Problem With a Spot Bitcoin ETF

The Grayscale CEO that it is “a matter of when and not if” the SEC approves a spot Bitcoin ETF. He further adds that the U.S. SEC should look at the futures ETF and the spot ETF through the same lens. If not so, then the securities regulator is violating the “Administrative Procedure Act violation”.

Grayscale has filed for converting its Grayscale Bitcoin Trust to a spot Bitcoin ETF. They shall be hearing back from the SEC by July this year. The Grayscale CEO has hinted that they might sue the SEC if it rejects their plea.

Apart from Grayscale, there have been other critics of the SEC as well! Bitwise Asset Management’s Matt Hougan said:

“We’ve gotten the bitcoin futures ETF under the 40 Act. We’ve gotten the bitcoin futures ETF on under the 33 Act. The next step is what people actually want, which is a spot bitcoin ETF that gives pure exposure to bitcoin”.

As per Bitwise’s survey of financial advisors, a staggering 82% prefer a spot Bitcoin ETF over its futures-based alternative.

Bhushan is a FinTech enthusiast and holds a good flair in understanding financial markets. His interest in economics and finance draw his attention towards the new emerging Blockchain Technology and Cryptocurrency markets. He is continuously in a learning process and keeps himself motivated by sharing his acquired knowledge. In free time he reads thriller fictions novels and sometimes explore his culinary skills.
The presented content may include the personal opinion of the author and is subject to market condition. Do your market research before investing in cryptocurrencies. The author or the publication does not hold any responsibility for your personal financial loss.

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