Grayscale to Debut 3 New Crypto-Based ETFs: Details
- Grayscale Investments announced a new business arm named the Grayscale Funds Trust, a Delaware statutory trust structure.
- The new arm will be responsible for scaling the firm’s business around the world and managing its line of products in-house.
- Registration filings for three new crypto ETFs were made with the SEC amid growing tensions between the two entities.
- The three new offerings comprise an Ethereum Futures ETF, a Global Bitcoin Composite ETF, and a Privacy ETF.
Popular cryptocurrency asset management firm Grayscale Investments has been the topic of a number of discussions due to the financial conditions of its parent company, the Digital Currency Group, and the bankruptcy of one of its subsidiaries, Genesis, a crypto lending platform. Interestingly, the management firm has announced the creation of a new arm for its business along with three new crypto-focused exchange-traded funds, or ETFs. These filings come at a time when the firm is engaged in a battle with the United States Securities and Exchange Commission (SEC).
According to a press release dated May 9, the asset management company confirmed “the formation of Grayscale Funds Trust, a Delaware statutory trust structure that will allow Grayscale to independently manage its 1940 Act products as the firm continues to build out its ETF franchise.”
The CEO of the firm, Michael Sonnenshein, stated that “the creation of Grayscale Funds Trust reflects our dedication to scaling Grayscale’s business responsibly,” while adding:
“We are putting the necessary foundations in place so Grayscale can continue creating and managing regulated, future-forward products.”
It is important to mention here that the new arm of the firm will be responsible for the management of all the ETFs that the firm has trading on public stock exchanges in-house. Moreover, filings regarding three new crypto ETFs were made to the SEC at a time when the two entities are involved in a legal dispute regarding the latter’s continuous disapproval of a Bitcoin spot ETF.
The registration of the three new ETFs, which comprise an Ethereum Futures ETF, a Global Bitcoin Composite ETF, and a Privacy ETF, was confirmed by Grayscale. The Ethereum futures ETF would be responsible for providing indirect exposure to the price of the world’s second-largest crypto coin, Ether (ETH), by way of shares that track the price of ETH.
On the other hand, the Grayscale Global Bitcoin Composite ETF will be responsible for investing in exchange-traded products, or ETPs, that are related to or backed by the world’s largest cryptocurrency, Bitcoin (BTC), including Bitcoin mining firms.
Finally, the Grayscale Privacy ETF will be responsible for investing in companies that work on blockchain-based privacy technology.
Commenting on the registration of these new ETFs, Grayscale Global Head of ETFs David LaValle stated that “it has been incredibly exciting to build our ETF franchise – hiring a dedicated team, expanding our partnerships, and enhancing our position within the ETF ecosystem,” while adding:
“We are proud to have launched our first products in the U.S. and Europe in 2022, and today’s filing demonstrates our continued commitment to offering investors innovative ways to access the digital economy and transformative technologies using a familiar, trusted, regulated investment vehicle: the ETF.”
On the contrary, the Digital Currency Group announced on Tuesday that it aims to refinance outstanding obligations with its bankrupt lending division, Genesis, and raise growth capital. As per the bankruptcy filing from Genesis in January, the crypto conglomerate owes $575 million, which is due this month, and a $1.1 billion promissory note, which is due in June 2032.
Crypto firms have been given a fresh warning from SEC Chair Gary Gensler that they need to register their offerings with the regulator or face enforcement actions and leave the US market for good.