Grayscale Expands ETF Business With Funds Trust, 3 New Crypto Funds

Cryptocurrency asset manager Grayscale Investments has announced the launch of a new business arm named Grayscale Funds Trust along with the introduction of three new crypto-focused exchange-traded funds (ETFs).

"We are proud to have launched our first products in the U.S. and Europe in 2022, and today's filing demonstrates our continued commitment to offering investors innovative ways to access the digital economy and transformative technologies using a familiar, trusted, regulated investment vehicle: the ETF," Grayscale Global Head of ETFs David LaValle said in a news release Tuesday.

The Grayscale Funds Trust will act as a Delaware statutory trust structure to allow the asset manager to manage several of its publicly traded financial products in-house and pursue ETFs, according to CryptoSlate.

"The creation of Grayscale Funds Trust reflects our dedication to scaling Grayscale's business responsibly," Grayscale CEO Michael Sonnenshein said, as per the news release. "We are putting the necessary foundations in place so Grayscale can continue creating and managing regulated, future-forward products."

The ETFs include Ethereum Futures ETF which will retrieve value from exposure to Ethereum futures contracts, Privacy ETF to track the Indxx Privacy Index and Global Bitcoin Composite ETF which will use exchange-traded products and investment vehicles from Bitcoin mining companies, CoinTelegraph reported.

None of the ETFs will be available for public purchase until the Securities and Exchange Commission (SEC) approves the registration statement relating to Grayscale Funds Trust.

"A registration statement relating to Grayscale Funds Trust has been filed with the SEC but has not yet become effective. These securities may not be sold nor may offers to buy be accepted prior to the time the registration statement becomes effective," the company said in a tweet.

Over the years, Grayscale has emerged as one of the most notable investment firms offering crypto investment vehicles. The Grayscale Bitcoin Trust (GBTC), under the company's massive umbrella, alone has a market cap of $10.84 billion.

The development comes as the Connecticut-based asset management company continues to be embroiled in a conflict with the SEC to obtain permission to convert its $17 billion Grayscale Bitcoin Trust (GBTC) into a spot Bitcoin ETF product.

Grayscale went to court and sued the SEC on Jan. 13 for denying its application, maintaining that the regulator treated crypto spot traded exchange-traded products indiscriminately compared to futures products.

"Grayscale supports and believes in the SEC's mandate to protect investors, maintain fair, orderly, and efficient markets and facilitate capital formation — and we are deeply disappointed by and vehemently disagree with the SEC's decision to continue to deny spot bitcoin ETFs from coming to the U.S. market," Grayscale CEO Michael Sonnenshein said in a statement at the time.

While the SEC has approved a number of Bitcoin Futures ETFs, allowing buyers to explore the potential future value of BTC, it has been rejecting every application for a spot Bitcoin investment product. The regulator raised concerns over exposing investors to potential fraud and market manipulation.