Grayscale files Bitcoin ETF filing with U.S. Securities and Exchange Commission, adopts cash redemption model

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Grayscale files Bitcoin ETF filing with U.S. Securities and Exchange Commission, adopts cash redemption model

Grayscale submitted an updated filing with the U.S. Securities and Exchange Commission, paving the way for its GBTC to transform into a Bitcoin spot-traded fund (ETF) and adopt a cash redemption model.

According to James Seyffart, an ETF research analyst at Bloomberg Intelligence, Grayscale just submitted a revised S-3 filing to the SEC to convert GBTC into a Bitcoin ETF and attempt to adopt cash redemptions model.

“Even Grayscale accepted the SEC’s cash creation/redemption-only edict. It looks like they caved,” Seifert said. Previously, BlackRock, ARK Investments and 21Shares have also adopted this model for compliance and regulatory purposes.

Balchinas tweeted: "Grayscale finally gave in to cash-only creation, which was a big pushback. I'm pretty sure they've reached an AP deal (the critical final step) which will outline all the points. Still, it’s unclear whether they will be allowed to start on the first day of Cointucky Derby.”

“Participants may only submit cash orders under which the Authorized Participant will deposit or receive cash to a cash account when creating and redeeming baskets,” the filing states.

“The Fund is currently able to accept cash orders. However, like other spot Bitcoin exchange-traded products, the Fund is currently unable to create and redeem shares through physical transactions with authorized participants,” the filing reads.

Additionally, Grayscale’s filing includes confusing changes to airdrops and forks, according to financial lawyer Scott Johnson.

Johnson said: “The only confusing thing in the GBTC S-3 revision is the explicit abandonment of airdrops/forks. It’s not clear to me why they made this feels like the SEC mandated this behavior, But other issuers have not made similar changes."

Hashdex meets with SEC Chairman Gary Gensler

Meanwhile, other spot Bitcoin ETF issuers have been busy during this holiday period. Seifert revealed a memo documenting the arrangements for Hashdex’s meeting with the SEC on December 26.

Unlike most of the SEC’s past meetings with issuers, this time Samir Kerbage, Hashdex’s chief investment officer and head of product, met in the office of SEC Chairman Gary Gensler. Typically, issuers more commonly communicate with trading and markets or corporate finance departments rather than discussing directly with Gensler.

Jamie Ding

Jamie Ding

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