With the SEC’s latest approval of Teucrium’s bitcoin ETF utility, Grayscale legal professionals are turning up the warmth towards the regulatory watchdog, by lobbying for early conversion of its pending ETF utility, citing inconsistencies within the SEC’s checklist of approvals.
Lawyers representing the world’s largest digital asset supervisor have despatched a letter to the SEC, arguing that its bitcoin spot ETF is not any completely different from a Teucrium bitcoin futures ETF, accepted earlier this month.
“We believe that the Teucrium order confirms the fundamental point made in our November 29, 2021 letter…[w]hen it comes to approving ETPs, there is not a basis for treating spot bitcoin products differently from Bitcoin futures products,” reads a letter from Davis Pol & Wardwell.
The November 2021 letter additionally challenges the notions of fraud and market manipulation provided by SEC chair Gary Gensler, saying that the SEC has by no means been capable of show a distinction between market manipulation danger within the futures market and the spot market.
“If anything, derivatives markets present additional opportunities for manipulation on top of spot markets, which is why the derivatives markets have an additional layer of federal regulation, to begin with,” the letter reads.
Currently, Gensler has held off on approving spot ETFs, as be believes the bitcoin markets are ripe for manipulation and abuse. In his letter, he mentioned that each spot and futures-based Bitcoin merchandise “face exposure to the same underlying Bitcoin market, any fraud or manipulation in the underlying market will affect both products in the same way.”
Teucrium approval
Earlier this month, the SEC accepted Teucrium to difficulty a bitcoin futures ETF, which is distinguished by its submitting below the Securities Exchange Act of 1933 – quite than the Investment Company Act of 1940, which different firms have beforehand filed their functions below.
Bloomberg Analyst James Seyffart tweeted earlier this yr that submitting an ETF utility, such because the Teucrium ETF, below the 1933 act might pave the way in which for a bitcoin spot ETF approval.
A future Grayscale lawsuit towards the SEC?
The SEC will rule on Grayscale’s utility in July later this yr. Attorney Timothy Spangler, a companion at Dechert, has mentioned that nations like Canada and Australia have already decided that “bitcoin is a mature enough asset to be included in a publicly-traded vehicle.”
“I fear that the opposition to including broader amounts of crypto in retail financial products is more philosophical than has to do with specifics,” he added.
In the meantime, Grayscale CEO Michael Sonnenshein has mentioned that authorized motion towards the SEC is a definite chance ought to their utility get denied.
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