Cryptocurrency asset manager Grayscale has updated its application for a Bitcoin Exchange Traded Fund (ETF) with the U.S. Securities and Exchange Commission (SEC), notably omitting the details of its authorized participants.
Eric Balchunas, a senior ETF analyst at Bloomberg, pointed out on X (formerly Twitter) that Grayscale's revised filing specifies that the ETF's authorized participants would be restricted to dealing only in cash when creating or redeeming shares. Authorized participants are typically financial institutions or companies designated to handle the creation and redemption of ETF shares.
However, Balchunas highlighted Grayscale's decision to leave out the names of these participants in their latest filing. He expressed uncertainty over this choice, noting the SEC's interest in such details and the lack of apparent disadvantages to disclosing them. He remarked, "That's a big unanswered question as well."
On December 29, seven firms, including Grayscale, submitted updated Form S-1 applications for launching the first U.S. spot Bitcoin ETFs. Notably, competitors like Fidelity, WisdomTree, and Invesco Galaxy listed their authorized participants in their filings. Invesco Galaxy partnered with Virtu and JPMorgan Chase, while WisdomTree and Fidelity chose Jane Street Capital.
Previously, in June 2022, Grayscale had expressed intentions to name Jane Street and Virtu Financial as its authorized participants when converting its Grayscale Bitcoin Trust into an ETF. Balchunas commented on the lack of clarity regarding why Grayscale left out this information, especially when others have provided it.
He remarked, "Yes, they even tweeted that of course they have a horse, but as far as I know (in Philly accent) it's not in the documents yet (which is what the SEC wants) and until we see it, we won't consider any horse as an official horse. And, BlackRock, Fidelity, and others do it, so why not end it?"
On December 27, the same day Barry Silbert, CEO of Grayscale's parent company Digital Money Group, resigned from Grayscale's board, Grayscale filed an amended S-3 with the SEC.
The SEC's deadline to decide on the latest batch of Bitcoin ETF applications, including Grayscale's, is set for January 10. Industry insiders anticipate the SEC's responses to these filings by the end of the first week of 2024.
