SEC’s Argument Against A Spot BTC ETF Approval Is Now Weak – Mike Sonnenshein
Grayscale Chief Executive, Mike Sonnenshein, has opined that the US SEC no longer has a strong basis for argument not to approve a spot ETF. Sonnenshein claimed that he concluded after the financial watchdog recently approved a BTC futures ETF. On April 7, the US financial watchdog granted fund managers (based in the new york state area) the approval to start offering BTC futures ETF.
Before granting this approval, the US SEC had previously approved a BTC futures ETF for three other operators (Grayscale, VanEck, and Valkyrie). However, the SEC has yet to approve any proposal of a spot BTC ETF, claiming a lack of clarity around crypto regulation and uncertainty over investor protection.
SEC’s Argument No Longer Holds Water
Sonnenshein used a Twitter thread to explain that the SEC contradicted itself after recently approving Teucrium’s BTC futures ETF proposal. He added that the SEC’s argument against not approving a spot BTC ETF became weaker with this approval. You’d recall that the SEC has continually rejected spot BTC ETF proposals based on a 1940 investor protection policy.
However, the SEC approved the Teucrium ETF based on a 1933 investor protection bill. Thus, indicating that the SEC’s reference to the 1940 act no longer has any significant effect. Then, the Grayscale CEO revealed that the company would use this basis when they sent their next spot BTC ETF proposal to the SEC.
Getting SEC’s Approval In Any Way Possible
“If the SEC can approve a BTC futures ETF without fuss, then there is no reason why it can’t approve a spot BTC ETF. Also, they can’t justify the non-approval using the 1940 act again.” Sonnenshein already had this perspective in mind when he revealed in a recent interview that Grayscale might likely sue the SEC if the financial regulator denies their next spot BTC ETF proposal.
Grayscale continues to make all efforts to ensure that the SEC approves its next spot BTC ETF proposal. One such effort is seeking public comments regarding their proposal, which the fund is still reviewing. Crypto asset management firms hope that the SEC changes its stance on approving a spot BTC ETF. But, a popular Twitter crypto analyst (Doomberg) revealed that the SEC is approving BTC futures ETF because futures contracts can be “settled with cash,” while spot BTC ETF cannot.
Will The SEC Approve A Spot BTC ETF This Year?
Canada and most European authorities have approved various crypto ETFs, and they have enjoyed several benefits from doing so. One of the biggest gains is that institutional investors are now more willing to invest in the digital asset space. The financial watchdog has maintained its anti-crypto stance, including direct ETF exposure for investors.
However, the SEC may soften its anti-crypto stance soon since the federal authorities are now receptive toward crypto. Many industry analysts see last month’s crypto executive order by the US President as a positive sign of crypto regulation by the US. Part of the order mandates that federal agencies are also expected to reason together in developing appropriate crypto regulatory policies.
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