The U.S. Securities and Exchange Commission on April 6, 2022 approved NYSE Arca’s proposed rule change to list and trade shares of the Teucrium Bitcoin Futures Fund. The order, Release No. 34-94620, gave a new bitcoin-linked exchange-traded product a route to market after the agency found the exchange’s proposal consistent with core anti-manipulation and investor-protection provisions of the Securities Exchange Act of 1934.
The decision mattered beyond one fund. The Teucrium vehicle was structured as a commodity-futures product registered under the Securities Act of 1933, rather than as an investment company under the Investment Company Act of 1940. The bitcoin-futures ETFs already trading in the United States had used the 1940 Act framework. On April 6, the approval therefore tested whether a futures-based product could satisfy the exchange-listing standard without relying on the 1940 Act protections that SEC Chair Gary Gensler had emphasized when discussing the first wave of bitcoin-futures funds.
What the SEC approved
The Commission approved NYSE Arca filing SR-NYSEArca-2021-53, as modified by Amendment No. 2. It did not approve the purchase or custody of bitcoin by the fund. Under the approved design, the fund’s only non-cash holdings would be cash-settled bitcoin futures listed on CME: the standard contract representing five bitcoin and the micro contract representing 0.10 bitcoin. Cash and cash equivalents were also permitted.
The fund’s benchmark would use closing settlement prices for CME bitcoin futures. Its strategy was intended to track daily benchmark changes by holding and regularly rolling those contracts; the filing said positions would not be carried through final cash settlement. That structure creates futures-specific exposures, including contract-roll effects and the possibility that shareholder returns diverge from changes in the spot price of bitcoin.
The order was also narrower than a general endorsement of bitcoin. The SEC expressly said its action did not evaluate whether bitcoin or blockchain technology had utility or investment value. It approved an exchange rule change on the specific record before it.
Surveillance carried the decision
The central regulatory question was whether NYSE Arca could meet Section 6(b)(5) of the Exchange Act, including the requirement that exchange rules be designed to prevent fraud and manipulation. The SEC found that NYSE Arca and CME shared membership in the Intermarket Surveillance Group, which the agency treated as the equivalent of a comprehensive surveillance-sharing agreement. CME’s bitcoin-futures market was CFTC-regulated, and the fund’s only non-cash assets would trade on that same market.
The Commission did not accept every claim made in support of the proposal. It said the record did not show that CME led bitcoin price discovery or that CME futures stood apart from spot bitcoin markets. Its approval instead rested on the direct link between CME surveillance and the contracts the fund would actually own.
Market-scale evidence also informed the finding. NYSE Arca reported in the rulemaking record that trading in CME’s standard bitcoin futures totaled $44.6 billion in December 2021. The SEC said that, as of March 31, 2022, the ProShares Bitcoin Strategy ETF held about $1.31 billion and represented about 49.6% of open interest in CME’s front two monthly standard contracts. Based on CME data available to it, the agency said it had not observed those existing futures ETFs disrupting settlement prices, spreads or roll costs. Those figures describe specified historical windows and did not guarantee future liquidity or orderly trading.
The boundary around spot bitcoin
Contemporaneous coverage treated the 1933 Act structure as potentially important for the unresolved spot-ETF debate. That was interpretation, not the holding. As of April 6, 2022, the SEC had disapproved spot bitcoin exchange-traded product proposals over manipulation and surveillance concerns. The Teucrium order distinguished a fund holding CME futures from a vehicle holding bitcoin itself. The verified event-day conclusion was therefore limited but consequential: the agency had accepted a second statutory route for regulated bitcoin-futures exposure, while leaving the spot question open.
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