Grayscale Seeks SEC Permission to Convert Largest Ethereum Investment Product to Spot ETF

Crypto asset manager Grayscale Investments has applied with the SEC to convert its Ethereum Trust to a spot Ethereum ETF.

Leading crypto asset manager Grayscale Investments is seeking to convert its Ethereum Trust (ETHE) to a spot ethereum exchange-traded fund (ETF).

According to an announcement today, Grayscale partnered with the New York Stock Exchange (NYSE) Arca to file for the conversion with the SEC.

“We are proud to partner with NYSE Arca on this filing and look forward to engaging with the SEC on the next steps,” said David Lavalle, Grayscale’s Head of ETFs.

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Commenting on the development, Grayscale’s CEO Michael Sonnenshein noted that the company is focused on giving its users regulated and transparent access to crypto. He added:

“As we file to convert ETHE to an ETF, the natural next step in the product’s evolution, we recognize this as an important moment to bring Ethereum even further into the U.S. regulatory perimeter.”

Grayscale Ethereum Trust (ETHE)

Launched in March 2019, ETHE is a Grayscale trust that gives institutional investors indirect exposure to Ethereum. Per Grayscale, the trust voluntarily became an SEC reporting company in October 2020.

In addition, the trust has grown tremendously over the years, with a holding of $4.9 million in assets under management (AUM).

Interestingly, the Grayscale Ethereum Trust is now the largest ether investment product globally, accounting for 2.5% of all ETH in circulation. Furthermore, Grayscale claims over 250,000 American investors hold the product in their accounts.

Grayscale Aims to Convert Its Crypto Investment Products to ETFs

It is worth noting that the Ethereum Trust is one of 17 different crypt investment products offered by Grayscale. The company revealed that it plans on taking these digital asset products via an intended four-phase cycle, with the ultimate goal of converting each of them to an ETF.

Recall that Grayscale had initially attempted to convert its Bitcoin Trust (GBTC) to a spot bitcoin exchange-traded fund. However, the SEC rejected the request, prompting Grayscale to take legal action against the agency.

As reported earlier, the U.S. Court of Appeals for the District of Columbia Circuit ruled in favor of Grayscale, ordering the SEC to review its decision.

Since the ruling, the SEC has not decided whether to approve Grayscale’s request to launch a spot Bitcoin ETF.