Grayscale Updates Spot Bitcoin ETF Filing, Omitting Key Information
Crypto asset management firm Grayscale Investments has submitted an updated filing for its spot bitcoin ETF to the U.S. Securities and Exchange Commission (SEC). The firm hopes to be included in the initial round of decisions by the SEC. However, Grayscale has left out some important details that the SEC reportedly wants to see in the filing. These details include information about authorized participants. Most other asset managers seeking to launch spot bitcoin ETFs have disclosed this information in their amended filings.
Grayscale’s Third Amendment to Spot Bitcoin ETF Filing
Grayscale filed the third amendment to its S-3 filing to convert its bitcoin trust (GBTC) into a spot bitcoin ETF on Friday. This was in accordance with the deadline given by the SEC for amended filings from asset managers looking to launch spot bitcoin ETFs.
SEC Requires Updated Filings from Spot Bitcoin ETF Applicants
The SEC set a deadline for spot bitcoin ETF applicants to submit updated filings by last Friday if they wanted to be considered in the initial round of decisions. The first deadline for decision-making is January 10. However, there are expectations that the SEC might issue a decision before that date.
Grayscale’s Named Authorized Participants
While Grayscale did not disclose the names of its authorized participants in the updated filing, CEO Michael Sonnenshein claimed that the company has lined up authorized participants since 2017. In previous statements, he mentioned working with Jane Street and Virtu Financial as authorized participants if the SEC approves the conversion of GBTC into a spot bitcoin ETF.
Spot Bitcoin ETF Applicants Naming Authorized Participants
Several other spot bitcoin ETF applicants have named their authorized participants in their filings. Blackrock named Jane Street and JPMorgan, while Wisdomtree, Fidelity, Valkyrie, and Invesco/Galaxy also named Jane Street. Invesco/Galaxy additionally named Virtu and JPMorgan as authorized participants.
Grayscale’s Spot Bitcoin ETF Proposal Reevaluation
The SEC initially rejected Grayscale’s spot bitcoin ETF proposal but now faces a court order to reevaluate it. Grayscale and other applicants want to use the in-kind creation model, while the SEC prefers the cash creation method. Grayscale switched to the cash method in its second amendment. The company also recently announced the resignation of Barry Silbert from its board of directors.
Hot Take: Grayscale’s Incomplete Filing May Impact Spot Bitcoin ETF Approval
Grayscale’s decision to omit key information from its spot bitcoin ETF filing, including details about authorized participants, could have implications for the approval of its ETF. The SEC has reportedly expressed the need for this information, and other asset managers have included it in their filings. Grayscale’s failure to provide this information may raise concerns and potentially delay the approval process. While Grayscale has assured the presence of authorized participants, their absence from the filing raises questions about transparency and compliance. The SEC’s decision on Grayscale’s spot bitcoin ETF will be closely watched by the crypto community as it could set a precedent for future ETF applications.
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