May. 12, 2022
I am submitting the following comments. GBTCs application should be approved. A spot ETF is what people actually want” in terms of institutional investment products linked to Bitcoin. The SEC looking at two like issues, the futures ETF and the spot ETF, through the same lens, is, in fact, grounds for an Administrative Procedure Act violation. Because both spot and futures-based Bitcoin products face exposure to the same underlying Bitcoin market, any fraud or manipulation in the underlying market will affect both products in the same way. Therefore, the existence of these risks cannot be a justification for approving one application and rejecting the other. The Teucrium order confirms that when it comes to approving exchanged traded products, there is no basis for treating spot Bitcoin products differently from Bitcoin futures products. The Exchange Act that clearly prohibits exchanges from having rules that “permit unfair discrimination” between issuers. In view of Grayscale, as the listing exchange for Teucrium also seeks to list Bitcoin, an “order disapproving the same exchange’s application to list Bitcoin over concerns with the underlying Bitcoin market would create an unfair discrimination.” Bitcoin is not a security. The SEC cannot justify using the “Howey” test to defend the argument that most of the digital assets are securities and therefore fall under its supervision. With Bitcoin there is no “investment of money in a common enterprise with a reasonable expectation of profits to be derived from the efforts of others.” Bitcoin is simply a digital currency. Futures based ETFs solve none of the pain points that a spot product would while bringing new pain points that spot ETFs do not have. Thomas J Williams