Grayscale Refiles Bitcoin ETF Application
27 Dec, 2023 ● Kripto novosti
On the day that CEO of Grayscale's parent company, Digital Currency Group, announced his resignation from the board of directors, cryptocurrency asset manager Grayscale filed an amended S-3 filing with the US securities regulator.
A few observers of the cryptocurrency market surmise that Silbert's exit may dramatically raise the likelihood that Grayscale, which is presently awaiting an answer from the Securities and Exchange Commission (SEC), will be able to effectively transform its Grayscale Bitcoin Trust (GBTC) into a spot Bitcoin ETF.
According to Ramah Luwalia, CEO of Lumida Wealth, Silbert most likely resigned on his own initiative to increase the likelihood that the ETF would be approved, partly because of the SEC's ongoing investigation into Silbert and DCG.
According to Adam Cochran, a partner at the cryptocurrency venture capital firm Cinneamhain Ventures, Grayscale and the SEC definitely made an agreement before Silbert decided to resign.
In an 8-K filing to the SEC on December 26, the company announced that Mark Shifke, the chief financial officer of DCG, will take Silbert's place as Grayscale's chairman of the board. Silbert's departure was noted in the filing.
According to senior Bloomberg ETF analyst Eric Balchunas, the most noteworthy aspect of the amended S-3 filing—aside from Silbert's resignation—was that Grayscale had "finally surrendered" to a cash creation model.
The SEC and asset managers hoping to introduce a spot Bitcoin ETF have been at odds over cash vs. in-kind creations.
While the majority of exchange-traded funds (ETFs) based on stocks and commodities operate under the in-kind model, which permits fund market participants to manage the fund's asset directly, a spot Bitcoin ETF with a cash-creation model restricts the creation and redemption of new shares to cash transactions.
It has been believed that the SEC's decision to forbid broker-dealers from transacting directly with Bitcoin is an effort to better track the cryptocurrency as it leaves exchanges and reduce any possible risks related to anti-money laundering or Know Your Customer compliance.
Although the SEC claims to protect investors, according to VB Capital general partner Scott Johnsson, investors hoping to purchase Bitcoin through a spot ETF may be more at risk due to the cash creation model.
Johnsson stated, "This must be done in a novel way via cash and who knows if that will work, despite all other spot commodity ETFs operating with in-kind models."
Sources:
https://cointelegraph.com/news/grayscale-bitcoin-etf-application-barry-silbert-departure
https://www.sec.gov/ix?doc=/Archives/edgar/data/0001588489/000095017023072820/gbtc-20231226.htm
https://twitter.com/SGJohnsson/status/1739807878372827507
https://twitter.com/EricBalchunas/status/1739795624755708298
