The SEC announced the approval in a filing on its website, adding Teucrium to a host of other bitcoin futures ETF issuers, just days after rejecting a spot Bitcoin ETF application from Cathie Wood-run ARK Investment Management LLC.
The US Securities and Exchange Commission (SEC) on Wednesday, gave the green light for NYSE Arca and Teucrium Trading LLC to issue a Bitcoin futures exchange-traded fund.
The SEC announced the approval in a filing, adding Teucrium to a host of other bitcoin futures ETF issuers, just days after rejecting a spot Bitcoin ETF application from Cathie Wood-run ARK Investment Management LLC. NYSE Arca, the maiden all-electronic exchange in the United States, applied under the Securities Exchange Act of 1934, filing a 19b-4 form with the SEC, for a rule change to permit the trading of Teucrium’s fund on its ETFs platform.
The already-approved bitcoin futures ETFs filed by other companies were under the Investment Company Act of 1940, which follows a slightly different regulatory path to approval.
According to James Seyffart, an Intelligence ETF Analyst with Bloomberg, earlier Bitcoin ETF approvals for funds like ProShares and Valkyrie Investments under the Investment Company Act of 1940 were exempt from the 19b-4 process. ‘The process places the onus on the applicant to allay any concerns raised by the SEC’s Division of Trading and Markets,’ he added. Valkyrie, in the latter stages of last year, also filed to launch a 33 Act bitcoin futures ETF with market experts describing Its application as outstanding.
Seyffart, earlier this year took to Twitter to reveal that, an approval under the Securities Act of 1933, under which Teucrium’s filing falls, may potentially open the door for a spot bitcoin ETF. During his engagement on the social media app, he cited an argument from crypto business Grayscale, which filed to convert its Grayscale Bitcoin Fund (GBTC) to an ETF, as an example of why proponents of crypto ETFs claim that “similar situations must be treated same.”
The SEC to date has rejected all spot bitcoin ETF applications, citing market manipulation concerns and the lack of a surveillance-sharing agreement between an ETF issuer and a significant market that trades the underlying asset. That, however, hasn’t stopped several companies from attempting to launch a bitcoin ETF as the latest approval of the new fund now puts them in an uncomfortable position and will need stronger arguments to avoid rules violations during the next hearing on a spot Bitcoin ETP.
“The SEC has not had the opportunity to consider whether a proposal for a Bitcoin futures-based exchange-traded product (ETP) is consistent with the Exchange Act since the early stages of bitcoin futures trading on a regulated market,” the SEC stated on its website on Wednesday. “With respect to the proposed ETP, the underlying bitcoin assets are Chicago Mercantile Exchange (CME) bitcoin futures contracts,” it added.
According to additional reports, the SEC agreed with Arca’s contention that the CME, as a Commodity Futures Trading Commission (CFTC)-regulated futures exchange, “has the requisite oversight, controls, and regulatory scrutiny necessary to maintain, promote, and effectuate fair and transparent trading of its listed products,” including micro Bitcoin futures (MBT) contracts and BTC contracts.
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