SEC Risks Violating Admin Procedure Act by Rejecting Spot Bitcoin ETFs, Says Grayscale

The Securities and Exchange Commission (SEC) of the United States has officially approved two separate bitcoin futures exchange-traded funds (ETFs). This has fueled speculation in the crypto community that the Securities and Exchange Commission is on the verge of authorizing a spot bitcoin ETF. The Investment Company Act of 1940 is used in the first structure (40 Act). This Act has been used to file the majority of proposed bitcoin futures ETFs so far. The Securities Act of 1933 is used in the second (33 Act). The Teucrium Bitcoin Futures ETF, which uses the latter format, was approved earlier this month. Grayscale Investments CEO Michael Sonnenshein explained to CNBC last week: “From the SEC standpoint, there were several protections that 40 Act products have that 33 [Securities Act of 1933] 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.” He continued: “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.” Sonnenshein opined: “If the SEC can’t look at two like issues, the futures ETF and the spot ETF, through the same lens, then it is, in fact, potentially grounds for an Administrative Procedure Act v...