SEC Meets with Grayscale to Discuss Spot Bitcoin ETF Listing

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The U.S. Securities and Exchange Commission (SEC) has recently held discussions with Grayscale about converting the Grayscale Bitcoin Trust (GBTC) into its spot Bitcoin exchange-traded fund (ETF).

A memorandum published by the SEC indicates that officials from the agency’s Division of Trading and Markets met with Grayscale Investments on Nov. 20 to consider the listing matters for turning its Bitcoin Trust into a spot bitcoin ETF.

According to the memo, 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.”

The participants of the meeting included David Shillman, the Associate Director in the SEC’s Division of Trading and Markets, who oversees the U.S. equity, options and fixed income markets, and Michael Sonnenshein, the CEO at Grayscale Investments. Grayscale’s external representatives from Davis Polk & Wardwell LLP also attended the meeting.

Another filing revealed that Grayscale has agreed with the Bank of New York Mellon for it to act as the transfer agent for the trust’s shares.

Grayscale Investments’ Spot Bitcoin ETF Filing

In October, Grayscale filed an updated application for its spot Bitcoin ETF. The updated application came after the court ruling favor Grayscale’s previous application. More specifically, the U.S. Court of Appeals for the District of Columbia Circuit ruled in favor of Grayscale ordering the SEC to set aside its earlier rejection of Grayscale’s application and reopen the review process.

In the meantime, other major financial institutions, including BlackRock, Ark Invest, and Fidelity are also seeking opportunities to list their spot Bitcoin ETFs. However, the SEC has been constantly postponing applications filed by different entities.

Grayscale had meetings with the SEC’s division of trading and markets yesterday (the division in charge of approving or denying 19b-4’s). Have also heard rumblings of other potential spot #bitcoin ETF issuers meeting with SEC in the last ~week or so. https://t.co/WHs5zxLqVD

— James Seyffart (@JSeyff) November 21, 2023

Bloomberg Intelligence Analyst James Seyffart said that he has also “heard rumblings of other potential spot Bitcoin ETF issuers meeting with SEC in the last week or so.” The frequent discussions may indicate a regulatory shift.