Cryptocurrency asset manager Grayscale has submitted an amended application for a Bitcoin exchange-traded fund (ETF) without providing the details of authorized participants. Bloomberg’s senior ETF analyst Eric Balchunas highlighted the amended filing on X (formerly Twitter), mentioning that the company clarified that authorized participants in their proposed ETF would only be able to transact in cash for shares.
Balchunas pointed out that Grayscale did not provide the names of its authorized participants in the amended documentation submitted to the United States Securities and Exchange Commission (SEC). It is unclear why Grayscale chose to omit this information when the SEC requires it, especially considering the SEC’s strong emphasis on having authorized participants. Additionally, there was no mention of the fee in the documentation. This raises an important question as well.
In a report on December 29, Cointelegraph stated that seven companies competing to launch the first U.S. Bitcoin ETF products submitted the latest versions of their Form S-1 applications. Fidelity, WisdomTree, and Invesco Galaxy disclosed their authorized participants in the new filings. Invesco Galaxy selected Virtu and JPMorgan, while WisdomTree and Fidelity listed Jane Street Capital.
Authorized participants are financial institutions or companies that have the ability to create and redeem shares of an ETF. Grayscale had previously indicated its intention to include Jane Street and Virtu Financial as authorized participants when it sought to convert its Grayscale Bitcoin Trust into an ETF in June 2022.
Balchunas further commented on the matter, expressing uncertainty as to why Grayscale deliberately left out its authorized participants while other firms provided this information. Balchunas mentions that Grayscale had tweeted that they have authorized participants, but the documentation does not reflect that, which is what the SEC requires. Therefore, Balchunas is not considering any information about authorized participants as official until it is seen in the documentation. Balchunas also questions why other companies like BlackRock and Fidelity have included this information, suggesting that Grayscale should have done the same.
On December 27, Grayscale submitted an amended S-3 filing to the SEC. Notably, on the same day, Barry Silbert, the CEO of Digital Currency Group (Grayscale’s parent company), announced his resignation from Grayscale’s board of directors.
The SEC’s deadline to deliver its decision on the latest filings from prospective Bitcoin ETF issuers is January 10. Industry experts have been suggesting that the SEC will provide answers to the applying firms by the end of the first week of 2024.