BlackRock and Ark also shifted to “Cash only”

On the 26th, US cryptocurrency investment firm Grayscale reported that it will adopt a “Cash only” Bitcoin ETF model in a new amendment to the SEC. This will align with other applicant companies such as BlackRock and Ark, which have shifted to a cash-only ETF issuance and redemption model.

Cash only means that when financial institutions (APs) that deal directly with ETF issuers conduct transactions, they do not bring in physical Bitcoin (in-kind) to acquire or sell ETF shares, but only cash. Refers to using.

Initially, BlackRock, ARK, Fidelity, and Grayscale tried to adopt the In-Kind model, but the SEC was reluctant to adopt “in-Kind”, so many amendments changed the model from In-Kind to Cash only. Changes have been made to.

connection: BlackRock submits Bitcoin ETF amendment proposal, narrows down issuance and redemption methods, “market favorably”

The proposed amendment also states that future Bitcoin airdrops and hard fork currencies will not be granted to ETF holders. Financial lawyer Scott Johnsson said on social media: “It is not clear why this change was made. Any changes to this in the future would require regulatory approval. Other issuers (previously GBTC) is taking a discretionary approach (e.g. deciding what to do in the event of a hard fork).” Additionally, some have raised the opinion that the change may have been made to avoid tax controversy regarding ETF grantor trusts.

The only real headscratcher in the GBTC S-3 amendment is a change to airdrops/forks whereby Grayscale is definitively abandoning all of them. Not clear to me why they made this change. And will require regulatory approval to modify this in the future. Other issuers (and GBTC… pic.twitter.com/jQ6ZhyhQ2y

— Scott Johnsson (@SGJohnsson) December 27, 2023

The revised proposal submitted this time is likely to be the final version ready for review in January next year. Last week, the SEC explained to multiple applicant companies, “If the final version of the application is not submitted by the 29th of this month, it will not be approved by early January.”

connection: U.S. SEC hints at January approval of Bitcoin spot ETF, application filing deadline set on 29th

connection:
Learn about Bitcoin ETFs from the beginning: Explaining the advantages and disadvantages of investing and how to buy US stocks

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