Grayscale updates registration statement for proposed Ethereum fund

abdelaziz Fathi

Grayscale Investments has updated its registration statement for its proposed Ethereum (ETH) fund, including detailed information on the treatment of ether and the amount held by the trust.

Grayscale Bitcoin Trust (GBTC)

On Thursday, Grayscale filed its amended S-3 registration statement, following BlackRock’s amended S-1 statement the previous day and a week after the U.S. Securities and Exchange Commission (SEC) approved 19b-4 forms for eight Ethereum exchange-traded funds (ETFs).

The updated filing from Grayscale includes specifics on the amount of ether required to create baskets of shares. “As of May 28, 2024, the number of Ether required to create a Basket of 100 Shares is approximately 0.94552590 Ether and the number of Ether required to create a Basket of 10,000 Shares after giving effect to the Amended Trust Agreement would have been 94.552590 Ether,” the statement read.

More registration statements are expected as the SEC has requested issuers to submit their drafts by Friday. Trading of the ETFs will not start until these registration statements become effective.

Grayscale moved to convert its Ethereum trust to a spot ether ETF in October of last year. Launched in March 2019, the Grayscale Ethereum trust is the largest ETH investment vehicle globally. The trust holds about 2.5% of Ether in circulation as of March 31, according to the filing.

Since the SEC’s approval of spot Ethereum ETFs last week, there has been industry speculation regarding ether’s status as a security. Coinbase Chief Legal Officer Paul Grewal, among others, has asserted that ether is no longer considered a security.

Grayscale addressed ether’s regulatory status in its latest filing, stating, “Other U.S. and state agencies, such as the SEC, have not made official pronouncements or issued guidance or rules regarding the treatment of Ether, although the SEC, by action through delegated authority approving exchange rule filings to list shares of trusts holding Ether as commodity-based exchange-traded products, has implicitly taken the view that Ether is a commodity.”

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