Grayscale Files Updated Spot Bitcoin ETF Prospectus After Meeting With SEC

Grayscale Investments filed an updated version of its spot Bitcoin exchange-traded fund (ETF) prospectus Wednesday after a meeting with the U.S. Securities and Exchange Commission.

There is not much update in the latest spot Bitcoin ETF prospectus of Grayscale, said Bloomberg Intelligence ETF analyst James Seyffart.

He pointed out that the latest filing contains "just more data points confirming that Grayscale is in talks with SEC and is making updates/changes to their offering docs after discussions with and feedback from the SEC." It also reportedly shortened a "line relating to cash orders" and removed "literal pages of the risk disclosures."

Finance lawyer Scott Johnson shared that the updated grayscale spot Bitcoin ETF prospectus mentioned about "maintaining principally in-kind creation/redemption with a limited cash process. Some new risk factors, including matching the Ark/21 RF expanded disclosure of fraud and manipulation risk."

Grayscale's updated spot Bitcoin ETF filing came after a meeting with the major Wall Street regulator.

Its CEO Michael Sonnenshein, ETF head Dave LaValle, legal chief Craig Salm and four other executives, along with five representatives from Davis Polk law firm, met with the division of trading and markets of the SEC on Monday.

"The discussion concerned 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," an SEC memo revealed.

At the meeting, Grayscale reportedly informed the commission that it has reached a Transfer Agency and Service Agreement with the Bank of New York Mellon for its spot Bitcoin ETF.

"On November 16, 2023, Grayscale Investments, LLC, the sponsor (the 'sponsor') of Grayscale Bitcoin Trust (the 'trust'), and the Bank of New York Mellon, a New York corporation authorized to do a banking business ('BNY Mellon'), entered into a Transfer Agency and Service Agreement engaging BNY Mellon to serve as the transfer agent for the Trust (the 'transfer agent'). Under the Transfer Agency and Service Agreement, the transfer agent will provide the following services to the trust and the sponsor: (1) facilitate the issuance and redemption of shares of the trust; (2) respond to correspondence by trust shareholders and others relating to its duties; (3) maintain shareholder accounts; and (4) make periodic reports to the trust," the filing read.

While the recent development does not explicitly say the SEC will approve Grayscale's spot Bitcoin ETF application, it however underlines that the application is making progress.