- DCG CEO Barry Silbert is resigning Grayscale chairman.
- The decision has heightened speculation of an imminent spot Bitcoin ETF approval.
- The SEC is expected to decide on spot Bitcoin ETF applications in a few days.
2023 has been rife with crypto organizational shake-ups as regulators hone in on the industry. In what many in the crypto space believe to be the latest instance of this, Grayscale has announced that Barry Silbert is resigning as Chairman. The development has been largely met with excitement from the crypto community amid anticipation of a spot Bitcoin ETF approval in the U.S.
Silbert’s Resignation Bullish for Spot Bitcoin ETF Approval?
In a Tuesday, December 26, SEC filing, Grayscale Investments announced that Barry Silbert, the CEO of Digital Currency Group (DCG), the parent company of Grayscale, is resigning from Grayscale’s board of directors as of January 1, 2024.
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While Grayscale did not state a reason for its decision in the filing, members of the crypto community have been quick to link it to Grayscale’s application to turn its Bitcoin Trust (GBTC) into an ETF, speculating that it is likely to improve the odds of an SEC approval.
Commenting on the development, Messari CEO Ryan Selkis described it as “Hyper bullish.” Selkis was not alone in this view, as Lumina Wealth Management CEO Ram Ahluwalia described Silbert’s decision as a Christmas gift to Grayscale CEO Michael Sonnenshein. Aside from increasing the chances that the SEC would approve Grayscale’s ETF application, Ahluwalia asserted that Silbert’s resignation would also give the firm greater autonomy.
These views come as the SEC had slapped Genesis, a lending firm under Silbert’s DCG, with an enforcement action for selling unregistered securities via a product offered in partnership with Gemini, called Gemini Earn that saw the latter deposit customer money with Genesis for the promise of interest payments.
The Gemini Earn product failed in November 2022, impacted by the collapse of FTX Genesis. It could no longer process Gemini Earn customer withdrawals, leaving about $900 million in customer deposits in limbo.
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Aside from the SEC lawsuit, the collapse of the Gemini Earn product also attracted a fraud case from the New York Attorney General’s Office against DCG and Genesis in October 2023. The NYAG accused DCG’s Silbert of defrauding investors by covering over $1 billion in losses.
Bitcoin ETF Approval Only Days Away?
In recent weeks, the SEC has been holding meetings with spot Bitcoin ETF applicants, including Grayscale, to iron out issues with the various applications, setting a deadline for final changes at December 29, according to sources. These negotiations come as the January 10 deadline for the SEC to decide on these ETF applications approaches.
One of the most significant changes Bitcoin ETF applicants have made following these discussions is to shift from in-kind creation and redemption models to cash only. A move that ensures that investors can only buy shares and sell shares for cash instead of Bitcoin, as the SEC held concerns that large investors could manipulate the market.
Bloomberg Intelligence analysts contend that there is a 90% chance that the SEC will approve Bitcoin spot ETFs by January 2024.
On the Flipside
- Barry Silbert remains in charge of DCG, Grayscale’s parent company.
- The SEC maintains the right to deny all Bitcoin ETF applications on January 10.
Why This Matters
The crypto community largely believes that approving a spot Bitcoin ETF would lead to an unprecedented capital inflow into Bitcoin that could send the price of the asset soaring.
Read this for more on the looming SEC Bitcoin ETF decision:
SEC Calls For Final Changes as Potential ETF Approval Looms
Learn about Polygon co-founder Sandeep Nailwal’s take on the recent Memecoin mania:
Polygon Founder Mulls Backing Memecoins as Mania Soars
