Grayscale engaged in talks with the SEC regarding the particulars of a spot Bitcoin ETF.
Grayscale's executives and legal representatives convened with the SEC to explore a rule modification for the listing of the Grayscale Bitcoin Trust (GBTC).
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Top-level executives from Grayscale, including CEO Michael Sonnenshein, legal chief Craig Salm, and ETF head Dave LaValle, recently engaged in extensive discussions with the Securities and Exchange Commission's (SEC) division of trading and markets. The primary focus of these discussions was the potential conversion of the Grayscale Bitcoin Trust (GBTC) into a spot Bitcoin exchange-traded fund (ETF). A memo released by the SEC on November 20 revealed that the talks specifically centered around NYSE Arca, Inc.'s proposed rule change, which aims to facilitate the listing and trading of GBTC shares under NYSE Arca Rule 8.201-E.
In a noteworthy development, Grayscale also disclosed the initiation of a Transfer Agency and Service Agreement with BNY Mellon. Under this agreement, BNY Mellon will act as the designated agent for Grayscale's Bitcoin Trust (GBTC), managing tasks such as share issuance and redemption, as well as maintaining shareholder accounts. Bloomberg ETF analyst James Seyffart highlighted this move on Twitter, suggesting that the agreement with BNY Mellon was likely a prerequisite, rather than an immediate signal of GBTC's conversion to an ETF.
Nate Geraci, President of ETF Store, added further insight by emphasizing a key aspect discussed during the SEC meeting: the reference to GBTC's "conversion" as an "uplisting." According to Geraci, this terminology does not necessarily indicate any obstacles to the conversion process but rather implies a strategic move. He opined that Grayscale stands a significant chance of dominating the ETF category if it can successfully "uplist GBTC to NYSE Arca" concurrently with the launch of spot Bitcoin ETFs by other issuers, coupled with competitive fee structures.
Grayscale had formally submitted an S-3 form registration statement to the SEC on October 19, expressing its intention to list GBTC shares on NYSE Arca with the ticker symbol GBTC. The process gained additional momentum in October when a U.S. appellate court mandated the SEC to review its earlier decision to deny Grayscale's request to convert GBTC into a spot ETF. Notably, Grayscale is not alone in seeking SEC approval for spot Bitcoin ETFs, as other major asset managers such as BlackRock and Fidelity are pursuing similar goals. Despite ongoing developments, Seyffart maintains his optimistic outlook, with a 90% likelihood of ETF approval on or before January 10, 2024.
