SEC Lays Out Path to Coveted Spot-Bitcoin ETF, But…

Andrew Kelly | Reuters

Could the latest approval for a bitcoin futures product hold the key to what it would take for the SEC to approve a long-coveted spot-bitcoin ETF?

Last month, the U.S. Securities and Exchange Commission gave the green light to fund firm Teucrium to issue a bitcoin futures exchange-traded product.

Sal Gilbertie, CEO of Teucrium, pointed out a footnote in the regulator's approval letter to CNBC's ETF Edge.   

In reference to the potential for fraud and manipulation it reads: "If, however, an exchange proposing to list and trade a spot bitcoin [product] identifies… the regulated market with which it has a comprehensive surveillance-sharing agreement, the exchange could overcome the Commission's concern…"

Gilbertie explains, "They've clearly spelled out that if the crypto exchanges… institute those comprehensive surveillance agreements with the ETF listing exchanges, they will get a crypto spot ETF."

But there-in lies the fundamental problem. Gilbertie concludes, "I don't think it's gonna happen because I don't see why those big crypto exchanges would want to centralize when the whole industry is made up around a decentralized concept."

Crypto firm Grayscale, one of the biggest proponents of a spot-bitcoin ETF and creator of the Grayscale Bitcoin Trust (BTC), recently threatened to sue to SEC over the issue.

But Gilbertie was not convinced of the effectiveness a such a tack arguing, "It would take years. The SEC is not going to succumb to that kind of pressure… unless you get a change in leadership who have a sea-change in how they are looking at things… they want to see crypto coins completely surveilled… I don't see how they're going to back down from that when they're all about investor protection."


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