Published: 18.04.2022
Article reading time:
2 minutes.
Grayscale Investments CEO Michael Sonnenshine believes that the SEC could be violating the Administrative Procedure Act if it does not approve a Bitcoin spot ETF.
Michael Sonnenshein said in an interview that the US Securities and Exchange Commission (SEC) approval of two different types of bitcoin ETFs sparked optimism in the crypto industry as the SEC moved closer to approving a bitcoin spot ETF.
He explained that the first type of ETF uses the Investment Company Act of 1940 (Act 40). Currently, the majority of applications for the launch of bitcoin futures ETFs are submitted in accordance with this law. Applications for the second type of Bitcoin ETF are made under the Securities Act of 1933 (Act 33). These exchange-traded funds include the Teucrium Bitcoin Futures ETF, which was approved by the regulator in April.
“From the SEC’s point of view, there were several protections that Law 40 products have that Law 33 products do not have. But never did those protections address the issue of the possibility of fraud or manipulation in the bitcoin spot markets,” Sonnenschein said. “So the fact that they have now changed their minds and approved a product under Law 33 – Teucrium Bitcoin Futures – speaks to the connection between bitcoin futures and the spot markets that give futures contracts their value.”
The CEO of Grayscale Investments believes that if the SEC cannot treat a futures ETF and a spot ETF from the same position, then this is in fact a potential basis for violating the Administrative Procedure Act.
Sonnenshine’s statement was made on the eve of preparations for a lawsuit against the SEC in the event of the regulator’s refusal to launch a spot ETF for bitcoin Grayscale Investments.
Source: Bits
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