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Grayscale Investment secures FINRA approval for public quote of Digital Large Cap Fund

Tue, 15 Oct 2019, 09:45 am UTC

Digital asset management fund Grayscale Investment has secured regulatory approval from the U.S. Financial Industry Regulatory Authority (FINRA) to publicly quote the shares of its diversified cryptocurrency fund.

The New York-based firm has been approved to publicly quote its Grayscale Digital Large Cup Fund (GDLCF) on the over-the-counter (OTC) markets, which the firm claims is a first in the U.S.

The fund is similar to an ETF, where investors can gain exposure to crypto price movements via a diversified basket of large-cap digital currencies instead of directly buying, storing, and safekeeping digital assets.

Trading volume in the shares’ public quotation will not be available until they are authorized by the Depository Trust Company (DTC). However, Grayscale said that it expects to receive DTC-eligible shares in the near future, allowing investors to buy and sell DLC shares through investment accounts similar to other unregistered securities.

Please note that trading will not commence until Grayscale Digital Large Cap Fund receives DTC eligibility (the system underpinning the movement and settlement of securities). We will notify you once we have further clarity on the timing of DTC eligibility and the commencement of trading,” the announcement stated.

Since February 2018, GDLCF offered private placement to accredited investors. Shares created via private placement become eligible to sell publicly after a one-year holding period, as per the Securities Act.

Notably, GDLCF is not registered with the U.S. Securities and Exchange Commission, so it is not subject to disclosure or other U.S. securities laws requirements.

The majority of the basket comprises BTC, accounting for 80% of the fund. ETH controls 10%, whereas the remaining 10% is composed of BCH, XRP, and LTC.

In July, Grayscale announced that the Grayscale Bitcoin Trust (GBTC) will resume private placement of its shares for investors.

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