Grayscale Bitcoin Trust aims to become first reporting company under the SEC
Grayscale has just submitted a filing to the SEC that, if deemed effective, would transform it into the first cryptocurrency reporting company, a change that could attract more accredited investors.
Wed, 20 Nov 2019, 10:22 am UTC
Grayscale Investment has just announced that it has filed a registration statement with the Securities and Exchange Commission (SEC) via Form-10 for its Bitcoin Trust.
In a blog post published today, Nov. 19, the company said that it has done the filing voluntarily in an attempt to attract more investors that are on the fence about the crypto market.
If the SEC approves the filing, the trust’s shares will fall under the jurisdiction of the Exchange Act of 1934, which will turn it into the first-ever crypto investment vehicle that’s a reporting company under the SEC. The approval would also mean that some changes will be made in the trust’s operations.
However, Grayscale maintains that the structure of the trust will remain the same and the firm will not be added to the national securities exchange. The blog post highlighted four alterations of the trust’s scope.
The first one has already been mentioned, which is the transformation of the firm into a reporting company under the SEC. The second one is liquidity opportunity.
What this means is that accredited investors who own shares in the trust can liquidate their holdings much quicker. As it currently stands, the firm has a statutory holding period of 12 months before investors can liquidate their shares. If the SEC approves of the filing, that holding period will be cut in half.
Third, the trust could attract more institutional investors since being a reporting company under the SEC would provide more comfort to those who are worried about joining the crypto market. What’s more, the approval would also require Grayscale to provide a public quarterly and annual reports to the SEC, increasing transparency for investors. And lastly, the said public filings will be submitted as 10-Qs, 10Ks, and 8Ks, with additional compliance in pursuant to the Exchange Act.
Grayscale attempts to boost its success further
The regulatory body could ask for edits on the filing, as well as clarification on certain areas, CoinDesk reported.
Grayscale managing director Michael Sonnenshein admits that not everything is guaranteed at this point and they’re simply waiting what the SEC’s decision is going to be. This maneuver is coming in the wake of the trust performing spectacularly well this year, tripling its quarterly increase from $84.8 million in Q2 to $254 million in Q3.
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