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Grayscale Investments has filed an amended S-3 form with the Securities and Exchange Commission (SEC). This development comes shortly after Barry Silbert, Chairman of Grayscale Investments, stepped down from his position, as reported in a Dec. 26 filing.
UPDATE: @Grayscale just filed another amended S-3 to convert $GBTC into a #Bitcoin ETF. pic.twitter.com/TKPP9ufa9X
— James Seyffart (@JSeyff) December 26, 2023
The amended filing reflects Grayscale's compliance with the SEC's directive on cash-only orders. Despite the Trust's primary operation of creating and redeeming Baskets exclusively with Bitcoins, it now accommodates Authorized Participants submitting Cash Orders. This adjustment aligns Grayscale's practices with the SEC's emphasis on cash transactions over in-kind creations.
Ongoing Conflict Over Cash vs. In-Kind Creations
The ongoing conflict between asset managers, seeking to launch a spot Bitcoin ETF, and the SEC revolves around the choice between cash and in-kind creations. As part of its anti-money laundering and Know Your Customer compliance measures, the SEC prohibits broker-dealers from directly dealing in Bitcoin.
Worth noting, Grayscale's latest amendment builds upon its continuous efforts to enhance its 2018 filing. An earlier proposal in November proposed altering fee collection from a monthly to a daily structure and streamlining the creation and redemption of shares in an omnibus account.
Speculations Surrounding Leadership Change
With Barry Silbert's departure, some industry observers speculate that Grayscale's chances of successfully converting GBTC into a spot Bitcoin ETF may increase. Speculations suggest that Silbert's decision to step down may be part of an agreement between Grayscale and the SEC, possibly anticipating approval for the conversion request.
Barry's resignation was @Sonnenshein's X-Mas gift.
— Ram Ahluwalia CFA, Lumida (@ramahluwalia) December 26, 2023
What to make of @bsilbert resigning from Grayscale?
Grayscale has had 9 meetings with the SEC per the table below (h/t @JSeyff)
Today, there are only allegations against DCG which have not been resolved in a court of law.… https://t.co/d7tZFFAOoU pic.twitter.com/NjjdWq0F3a
Amidst these developments, Eric Balchunas, a senior analyst at Bloomberg, emphasizes the disruptive nature of ETFs, providing low-cost investment alternatives. Balchunas dismisses concerns raised by some crypto market commentators about the potential disappearance of Bitcoin if ETFs are approved, likening it to fear-mongering tactics witnessed in traditional finance.