Quick breakdown:
- The SEC has postponed its ruling on Nasdaq’s proposal to list Grayscale’s Hedera Trust, setting a new deadline for November 12.
- Simultaneously, Grayscale has filed updated registration documents with the SEC to convert its Bitcoin Cash and Litecoin trusts into exchange-traded funds (ETFs).
- This move aligns with Grayscale’s strategy to bring more altcoin ETFs to regulated markets, following its earlier success with Bitcoin and Ethereum ETFs.
The U.S. Securities and Exchange Commission (SEC) has postponed its decision regarding Nasdaq’s proposal to list the Grayscale Hedera Trust, setting a new deadline of November 12 for the review. On the same day, Grayscale submitted updated registration filings for its Bitcoin Cash and Litecoin trusts, signaling its intent to transform these closed-end trusts into exchange-traded funds (ETFs) listed on NYSE Arca.
Grayscale’s Hedera Trust listing application involves a Form S-1 registration. At the same time, the Bitcoin Cash and Litecoin filings were submitted using Form S-3, highlighting that these trusts are existing entities already compliant with SEC reporting requirements. The Bank of New York Mellon is designated as the administrator for the trusts, with Coinbase acting as prime broker and custodian.
This filing strategy follows Grayscale’s 2024 precedent, where it successfully converted its Bitcoin and Ethereum trusts into exchange-traded products after overcoming regulatory hurdles. The firm’s continued push to diversify its ETF offerings comes amidst a surge in crypto ETF applications submitted this year, contributing to a growing backlog for the SEC. Notably, this is the first-ever Bitcoin Cash ETF filing, reflecting Grayscale’s intent to capitalize on altcoin exposure through regulated financial products.
The SEC Approach to ETFs
The SEC’s decision to delay its ruling on Grayscale’s Hedera Trust aligns with a broader pattern of regulatory caution. Earlier in August, the commission extended its review timelines for several pending Solana ETF applications and other crypto-related ETFs, including those from Bitwise, 21Shares, and Fidelity. This cautious approach reflects the SEC’s efforts under Chair Paul Atkins to navigate the growing crypto funds landscape carefully, balancing market demand with the need for regulatory oversight.
Grayscale’s ambitious filing campaign adds to the growing list of institutional players like Fidelity and VanEck seeking regulatory approval for diversified crypto ETFs. Approval of these products would mark a significant milestone in the evolution of digital asset investment vehicles in the United States.
Grayscale’s filings and the SEC’s careful review process underscore the increasing mainstream financial integration of altcoins and digital assets, as regulatory frameworks continue to evolve.
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