New York-based cryptocurrency fund provider Grayscale has been offering several crypto products for OTC trading, with the most popular ones being its Bitcoin and Ethereum trust funds.
According to an announcement on October 12, Grayscale Investments’ Ethereum Trust has now become an SEC reporting company, enhancing the trust’s transparency, and also potentially boosting its liquidity.
The firm had filed a registration statement on Form 10 with the U.S. Securities and Exchange Commission (SEC) for its Ethereum Trust back in August.
One of the compliances of being an SEC reporting company is that the company must publicly file quarterly and annual reports with the regulator. This affords transparency when it comes to the holdings and performance of the Trust.
The trust will now file annual reports on Form 10-K, quarterly reports on Form 10-Q, and current reports on Form 8-K.
Today’s announcement states that the shares of its Ethereum Trust are now registered under Section 12(g) of the Securities Exchange Act of 1934. This allows accredited investors who hold it’s shares, to be able to sell right after a six-month lockup period rather than the traditional 12.
Michael Sonnenshein, managing director at Grayscale, said:
“We’re seeing interest from investors who have become more comfortable with digital currencies through bitcoin exposure, and are now looking at how else they can diversify within the asset class.”
The trust is Grayscale’s second crypto vehicle with shares registered under the Exchange Act of 1934. What makes this a major milestone for the institution is that its Bitcoin Trust only became an SEC reporting company in January 2020.
Growing Demand for Grayscale products
As previously reported by The Daily Chain, the firm announced the launch of its Bitcoin Cash and Litecoin trusts for trading on OTC Markets.
Prior to the listing 31, 2020, 6,028,000 shares were already outstanding for BCHG with each share representing ownership of 0.00941311 BCH, while LTCN had 2,500,800 shares with each share representing ownership of 0.09413112 LTC.
The firm submitted a quarterly report to the Securities and Exchange Commission (SEC) in August 2020, outlining the growth of its Bitcoin holdings by $1.6bln. Its Ethereum Trust accounted for nearly 15 percent of capital inflows into the company’s accounts in the second quarter of 2020, valued at around $135mln.
More than $900 million was raised in the second quarter of 2020 alone.
