Grayscale Bitcoin Trust is Now an SEC Reporting Company
Blockchain

Grayscale Bitcoin Trust is Now an SEC Reporting Company

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On January 21st, 2020, Grayscale Investments announced that its Grayscale Bitcoin Trust has become the first digital currency investment vehicle to attain the status of an SEC reporting company. In late 2019 the firm filed a Form 10 with the commission, which has now been deemed effective. As a result, the Grayscale Bitcoin Trust will now feature the regulatory reporting standards akin to public companies and exchange traded funds that trade on national exchanges.


Grayscale Bitcoin Trust as an SEC Reporting Company Explained

Grayscale Investments is the largest digital currency asset manager in the world. The firm offers 10 cryptocurrency investment products to both institutional and accredited investors, with four investments publicly traded and available to all investors.

Grayscale has now become an SEC reporting company. The firm received approval after filing with the commission back in November, on behalf of Grayscale Bitcoin Trust.

Grayscale Bitcoin Trust has now become the first digital currency investment vehicle to constitute an SEC reporting company. Reporting companies must file periodic reports with the SEC which include various aspects of the company’s financial history.

The different aspects typically depend on the size of the company. In the case of Grayscale Bitcoin Trust, it will have to file both quarterly and annual reports, including audited financial statements as well as 10-Qs and 10-Ks.

Grayscale Bitcoin Trust now constitutes the largest investment vehicle under the firm, with $2.4 billion in assets. All shares associated with the trust are registered with the SEC.

Back in 2018, the SEC offered the fund a private placement exemption from registration. However, Grayscale opted to follow through with the registration on its own, in a likely attempt to increase compliance and gain both respect and confidence from investors.

According to a statement from Grayscale,

“As many institutions restrict investments in instruments that are not registered with the SEC, a broader set of investors may now begin to consider the trust accordingly.”

Grayscale says the success of their funds demonstrates a strong demand for Bitcoin access products. In the firm’s Digital Asset Investment Report from 2019, the firm saw the largest investment into the Grayscale Bitcoin Trust to date, with $471.7 million throughout the year.

How Regulatory Compliance is Propelling the Digital Asset Space Forward

The SEC has unarguably been stringent in its enforcement when it comes to digital assets. Nonetheless, a number of developments have taken place.

Two Reg A+ token offerings were given the green light by the commission, including those launched by Blockstack and the Props Project. Blockstack raised $23 million with investors including Harvard’s endowment fund.

A number of companies in the security token space received transfer-agent registration confirmations from the SEC as well. These include tech provider Securitize and tokenization platform Harbor.

In addition, a growing number of central banks across the globe continue to research the benefits of implementing a central bank digital currency. China’s own national digital currency could reportedly launch anytime in the near future.

What do you think about Grayscale Bitcoin Trust becoming an SEC reporting company? We’d like to know what you think in the comments section below.


Image courtesy of Medium.

January 22, 2020

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Tim Fries Tim Fries is the cofounder of The Tokenist. He has a B. Sc. in Mechanical Engineering from the University of Michigan, and an MBA from the University of Chicago Booth School of Business. Tim served as a Senior Associate on the investment team at RW Baird's US Private Equity division, and is also the co-founder of Protective Technologies Capital, an investment firms specializing in sensing, protection and control solutions (IoT).