Grayscale met with SEC to discuss spot Bitcoin ETF details

Grayscale executives and solicitors met with the SEC to discuss a regulation change that would allow the Grayscale Bitcoin(BTC) Trust to be listed. Grayscale executives met with the Securities and Exchange Commission to discuss the mechanics of its flagship BTC trust, which the company wants to convert to a spot Bitcoin exchange-traded fund (ETF).Grayscale CEO Michael Sonnenshein, legal chief Craig Salm, ETF head Dave LaValle, and four other officials, as well as five Davis Polk law firm personnel, met with the SEC’s division of trading and markets, according to a Nov. 20 SEC memo.

Those discussions, according to the document, “concerned NYSE Arca, Inc.’s proposed rule change to list and trade shares of the Grayscale Bitcoin Trust (BTC) under NYSE Arca Rule 8.201-E.” According to a filing published by Bloomberg ETF analyst James Seyffart, Grayscale indicated that it had signed into a Transfer Agency and Service Agreement with BNY Mellon.

The bank will serve as the agent for its Grayscale Bitcoin Trust (GBTC), allowing the issue and redemption of shares as well as the maintenance of shareholder accounts. Seyffart said in a Nov. 21 X (Twitter) post that the trade and markets division is responsible for accepting or denying 19b-4s – a form used to notify the SEC of a proposed rule change by a self-regulatory organization.

Grayscale’s agreement with BNY Mellon, according to Seyffart, was “likely something that was always going to be required at some point” and isn’t an indication that the GBTC will be converted soon. ETF Store President Nate Geraci stated in a Nov. 22 X post that the “most substantive aspect of Grayscale’s SEC meeting yesterday is that GBTC ‘conversion’ is being referred to as a ‘uplisting.’ Grayscale has a good chance of dominating this ETF category if it can “uplist GBTC to NYSE Arca on the same day other issuers launch spot BTC ETFs,” and if it makes a determined attempt to compete on costs, according to Geraci.

Geraci stated that Grayscale will enter the markets on day one with $20 billion in assets under management, notwithstanding the presence of BlackRock. On October 19, Grayscale filed an S-3 form registration statement with the SEC, indicating its desire to list GBTC shares on the NYSE Arca under the ticker code GBTC. In October, a US appeals court ordered the SEC to reconsider its decision to reject Grayscale’s petition to convert the GBTC to a spot ETF. The firm is one of several big asset managers seeking SEC clearance for spot Bitcoin ETFs, including BlackRock and Fidelity.

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