Grayscale Attempting to Become the First Crypto Fund to Report to the SEC

Grayscale Investments, the asset management subsidiary of Digital Currency Group, has filed a Form 10 with the U.S. Securities and Exchange Commission (SEC), the company wrote in a blog post on 19 November.

According to the report, Grayscale has filed Form 10 to register its Bitcoin Trust as a reporting company, in an attempt to become the first crypto fund to report to the U.S. regulator.

The company has said that if the SEC deems its filling effective, the trust’s shares will be registered under the Exchange Act of 1934, and that several aspects of the fund’s operations could change.

Even though its shares are already publicly traded on an over the counter market, gaining the status of a reporting company would increase the transparency and liquidity for its shareholders.

If the status is granted, Grayscale will have the opportunity to expand its scope of operations, but still keep its current structure of the trust.

As some institutions restrict investors from participating in trusts that are not SEC-regulated reporting companies, gaining that status would expand Grayscale’s eligible investor audience.

The trust will also have to make updates on unscheduled events and corporate changes, as well as make public filings of its quarterly and annual reports.

If approved, the filing will also benefit accredited investors:

“Accredited investors who have previously purchased shares in the Trust’s private placement would have an earlier liquidity opportunity, as the statutory holding period of their private placement shares would be reduced from 12 to 6 months.”

If the registration of the trust is successful, shareholders who own more than 5 percent of the trust’s shares will have to file beneficial owner reports, while those with more than 10 percent of shares will have to report their transactions too.

Grayscale’s Bitcoin Trust is not the only one trying to provide investors with easy exposure to the leading cryptocurrency. As previously reported, investment management firm VanEck launched its own Bitcoin trust in September, though it issued only four Bitcoins during its first week.