| Reading the Numbers—‘33 or ‘40
While the three existing bitcoin futures ETFs were filed under the Investment Act of 1940, the latest from Teucrium Bitcoin Futures Fund was filed under the Investment Act of 1933. So why does this matter?
The United States has a variety of regulations when it comes to investment products. As the primary act for investment funds, the protections granted under what is commonly known as the ‘40 Act provide a higher level of investor protection. Specifically, the SEC has noted enhanced custody of fund assets, valuation and liquidity rules not covered under the ‘33 Act.
The approval of an ETF filed under the ‘33 Act, Grayscale CEO Michael Sonnenshein believes is a major step forward for the approval of a spot bitcoin ETF.
What Say the SEC?
The SEC has already rejected several ETF applications, most recently from Ark21 Shares.
While the SEC doesn’t appear to be in a hurry to approve any spot ETFs, there are dissenting opinions—most vocally from SEC Commissioner, Hester Peirce. Peirce has publicly questioned the reasoning behind the SEC denying spot ETF applications.
The approval of a spot bitcoin ETF can provide investors with the opportunity to own bitcoin as well as the ability to purchase through an existing brokerage account.
The SEC’s main concern in approving a spot bitcoin ETF is the lack of consumer protection. But as the number of individuals owning bitcoin grows substantially, and other countries approve spot bitcoin ETFs, is the SEC missing the mark?
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