Crypto asset manager Grayscale held a meeting with the Securities and Exchange Commission (SEC) regarding the conversion of its flagship fund – the Grayscale Bitcoin Trust (GBTC) – into a spot Bitcoin exchange-traded fund (ETF).
A Nov. 20 SEC memo disclosed Grayscale CEO Michael Sonnenshein, ETF head Dave LaValle, legal chief Craig Salm, and four other executives, along with five Davis Polk law firm representatives, meet with the U.S. SEC’s division of trading and markets. The discussion was centered around NYSE Arca’s proposed rule change to list and trade shares of the Grayscale Bitcoin Trust (BTC) under NYSE Arca Rule 8.201-E, as per the memo.
A former Davis Polk attorney and GP at Van Buren Capital, Scott Johnsson, shared another filing that detailed that Grayscale had entered a Transfer Agency and Service Agreement with the Bank of New York Mellon (BNY Mellon). BNY Mellon will act as the transfer agent for the GBTC, managing the issuance and redemption of shares and overseeing shareholder accounts.
Grayscale making preparations pic.twitter.com/9A87FZK1su
— Scott Johnsson (@SGJohnsson) November 21, 2023
Moreover, Bloomberg ETF analyst James Seyffart pointed out that the trading and markets division holds the authority to approve or reject 19b-4s —a form utilized to inform the SEC of a proposed rule change by a self-regulatory organization. He said the agreement between Grayscale and BNY Mellon is likely a requirement and doesn’t necessarily indicate an imminent conversion of GBTC.
Grayscale had meetings with the SEC’s division of trading and markets yesterday (the division in charge of approving or denying 19b-4’s). Have also heard rumblings of other potential spot #bitcoin ETF issuers meeting with SEC in the last ~week or so. https://t.co/WHs5zxLqVD
— James Seyffart (@JSeyff) November 21, 2023
Grayscale Investments’ Spot Bitcoin ETF Filing
Grayscale filed an updated application for its spot BTC ETF in October. The revised application followed a court ruling that favored Grayscale’s previous application. More specifically, the United States Court of Appeals for the District of Columbia Circuit ruled in favor of Grayscale, ordering the regulator to dismiss its prior denial of Grayscale’s application and resume the review process.
Meanwhile, other major financial institutions, including Fidelity, Ark Invest, and BlackRock, are also seeking opportunities to list their spot BTC ETFs. However, the regulator continues to delay applications submitted by various companies. Seyffart said he has also heard about other potential issuers of spot BTC ETFs meeting with the SEC in the past week or so. The frequent discussions may bring a regulatory shift.