Barry Silbert Steps Down as Grayscale Revamps ETF Bid With Cash-Only System

Grayscale Investments, a leading player in crypto asset management, has made waves with its recent filing to the United States Securities and Exchange Commission (SEC). The company aims to convert its well-known Grayscale Bitcoin Trust (GBTC) into a Bitcoin Exchange-Traded Fund (ETF).

This significant move comes as Barry Silbert, CEO of Grayscale’s parent company, Digital Currency Group (DCG), steps down from Grayscale’s board.

Barry Silbert’s Exit: A Calculated Move?

Barry Silbert’s unexpected departure has stirred discussions in the crypto community. Ram Ahluwalia, CEO of Lumida Wealth, believes Silbert’s exit might be a strategic move to enhance the ETF’s chances of approval. This happens as the SEC investigates Silbert’s and DCG’s activities.

Adam Cochran from Cinneamhain Ventures suggests that Silbert’s exit could be a planned step with the SEC to ease the ETF’s path to approval.

Grayscale’s New Approach: Cash-Creation Model

Grayscale’s updated filing introduces a change to a cash-creation system for the proposed spot Bitcoin ETF. Eric Balchunas, Senior ETF Analyst at Bloomberg, points out that Grayscale is now focusing on cash-only creations, a shift from the typical in-kind model used in many other ETFs.

This change seems to address the SEC’s concerns about in-kind creations for digital asset ETFs, particularly related to anti-money laundering measures and Know Your Customer requirements.

Read More: ETF Frenzy Intensifies: Anthony Scaramucci Predicts New Bitcoin High in 2024

Here’s How the SEC is Navigating It

Scott Johnsson, a finance lawyer and partner at VB Capital, raises concerns about the SEC’s cautious strategy. He suggests that the SEC’s strict rules could potentially reduce protections for investors. Johnsson highlights the inconsistency in the SEC’s stance, noting that their strict requirements for digital asset management might inadvertently create new risks for investors.

With the SEC’s decision pending, the crypto community is closely monitoring these developments. Grayscale’s amended filing represents a significant step in their efforts to transition GBTC, a major Bitcoin investment vehicle, into a compliant spot Bitcoin ETF.