Grayscale Updates Application for Spot Bitcoin ETF
Date: 2023-11-26 Author: Dima Zakharov Categories: IN WORLD
Conversion to Spot Bitcoin ETF
Grayscale recently met with the US Securities and Exchange Commission (SEC) on November 20 to discuss converting GBTC into a spot Bitcoin ETF. Following the meeting on November 22, Grayscale filed a new preliminary issuance prospectus to transform the GBTC fund into a spot ETF.
Changes in the Updated Application
The revised application submitted by Grayscale to the SEC mentions the company's intent to launch a spot Bitcoin ETF by converting its GBTC trust fund. Financial lawyer Scott Johnsson noted minimal alterations in the prospectus, primarily concerning the issuance and redemption being non-cash transactions. Additionally, the updated prospectus introduces new risk factors related to potential manipulation and fraud.
Insights from Bloomberg Intelligence Analyst
James Seyffart, a Bloomberg Intelligence analyst, mentioned that amendments and alterations in the prospectus confirm ongoing negotiations between the company and the SEC. He highlighted that these adjustments indicate Grayscale's responsiveness to feedback from the regulator.
Outcome of the SEC Meeting
Grayscale updated the issuance prospectus after meeting with representatives from the SEC's Division of Trading and Markets. Top executives of Grayscale attended, including CEO Michael Sonnenshein, Chief Legal Officer Craig Salm, and Director of Exchange-Traded Products Dave LaValle.
The meeting discussed NYSE Arca's proposed rule change regarding the listing and trading of Grayscale Bitcoin Trust shares under NYSE Arca Rule 8.201-E.
Grayscale announced an agreement with BNY Mellon for transfer agency and services. The esteemed US bank will serve as GBTC's transfer agent, facilitating share issuance and redemption, shareholder communication, and account maintenance.
Nate Geraci, President of ETF Store, highlighted the substantial aspect of Grayscale's meeting with the SEC: the shift from "conversion" to "uplisting" regarding GBTC.
James Seyffart indicated that the meeting outcomes and amendments in the issuance prospectus do not indicate approval timelines for the new instrument. He anticipates potential approval in January 2024, considering the SEC's current strategy of delays and extensions.
