The U.S. Securities and Exchange Commission (SEC) has recently engaged in discussions with Grayscale regarding the potential conversion of the Grayscale Bitcoin Trust (GBTC) into a spot Bitcoin exchange-traded fund (ETF).
According to a memorandum published by the SEC, officials from the agency’s Division of Trading and Markets met with Grayscale Investments on November 20 to deliberate on listing matters for transforming its Bitcoin Trust into a spot bitcoin ETF. The discussion specifically revolved around 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.
Key participants in the meeting included David Shillman, the Associate Director in the SEC’s Division of Trading and Markets, responsible for overseeing U.S. equity, options, and fixed income markets, and Michael Sonnenshein, the CEO at Grayscale Investments. Representatives from Davis Polk & Wardwell LLP, external to Grayscale, also attended the meeting.
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
In a separate filing, it was disclosed that Grayscale has reached an agreement with the Bank of New York Mellon to act as the transfer agent for the trust’s shares.
Grayscale Investments had filed an updated application for its spot Bitcoin ETF in October. This came after a court ruling favored Grayscale’s previous application, with the U.S. Court of Appeals for the District of Columbia Circuit instructing the SEC to set aside its earlier rejection and reopen the review process.
While Grayscale pursues the spot Bitcoin ETF, other major financial institutions such as BlackRock, Ark Invest, and Fidelity are also exploring opportunities to list their spot Bitcoin ETFs. However, the SEC has been consistently postponing applications from various entities. Bloomberg Intelligence Analyst James Seyffart noted that there are indications of other potential spot Bitcoin ETF issuers meeting with the SEC, suggesting a possible regulatory shift.