Grayscale bows to SEC’s spot Bitcoin ETF order while founder Barry Silbert resigns as Chairman

●Grayscale, despite being one of the first few applicants for a spot in Bitcoin ETF, was still unable to meet the SEC’s demand.

●According to an updated filing, the asset manager has surrendered to cash-only creation command.

●On the other hand, Grayscale’s founder, Barry Silbert, resigned as Chairman without providing any reason.

Grayscale is inching closer to achieving its goal of converting its Bitcoin Trust (GBTC) into a spot BTC ETF. The asset manager has been continually holding meetings with the Securities and Exchange Commission (SEC) and updating its filing to meet the regulatory body’s demand, and by the looks of it, Grayscale could be close to finally ready to re-launch its investment product.

Grayscale and SEC meet eye-to-eye

The spot Bitcoin ETF race has many competitors and only one shot at taking the lead. The SEC will likely approve the first wave of ETFs on January 10, 2024, and those who do not adhere to the regulatory authority’s demands by December 29 might not make it in the first list of approvals, per the SEC’s recent declaration.

Grayscale, which is the primary catalyst in making these ETFs happen after winning the court’s ruling against the SEC’s denial of its application, finally seems to be winning the regulator’s approval as well. According to court documents, the asset manager seems to have filed an amended S-3 to convert its GBTC into a spot BTC ETF.

Per this filing, Grayscale seems to be bending a knee to the SEC’s order of cash-only creation/redemption. This edict was accepted by many other applicants as well in the past, making this the set standard for approval.

Bloomberg ETF analyst Eric Balchunas, in regard to this development, stated,

“Grayscale finally surrendering to cash-only creations, was a big holdout. Pretty sure they have an AP agreement (a crucial last step) so that would check all the boxes. That said, still a mystery whether they will be allowed to go on day one of the Cointucky Derby.

While approval may come at the same time for the applicants, the launch of the investment product may vary, which could be the deciding factor in absorbing the market’s bullishness.

Grayscale sees management change

Ahead of the spot BTC ETF approval, Grayscale is also observing some changes in the key management. Founder Barry Silbert resigned from his position as the Chairman of Grayscale on Tuesday, according to an SEC filing.

He is set to be replaced by Mark Shifke, the chief financial officer (CFO) of Silbert’s Digital Currency Group. The reason for this change in management was not specified by the filing or the company. However, Silbert was not alone; Mark Murphy, the president of Digital Currency Group, also stepped down from the board.