Grayscale is evaluating the potential tax consequences associated with bitcoin (btc) exchange-traded funds (ETFs) following inaccurate reports circulating about unfavorable tax implications.
In a series of posts on
While we work to obtain the appropriate regulatory approvals to list $GBTC According to NYSE Arca, we are considering potential tax implications for spot bitcoin ETFs that must be sold. $btc cash holdings to meet share redemptions.
Here's why we're talking about this now. (1/7)– Grayscale (@Grayscale) December 15, 2023
Grayscale explained that this is because GBTC is structured as a grantor trust, meaning that the entity establishing the trust owns the assets (in this case, the underlying bitcoin) for income and tax purposes.
“Cash redemptions from grantor trusts are not taxable events for non-redeeming shareholders, such as retail investors,” the post said while explaining its difference from mutual funds:
“Unlike mutual funds and many other ETFs, substantially all spot commodity ETFs (e.g., gold) are structured to be grantor trusts for tax purposes. “We take the position that GBTC be appropriately treated as a grantor trust.”
Related: Brazil enacts overseas cryptocurrency tax bill
This follows recent reports that the United States Securities and Exchange Commission (SEC) held another meeting with Grayscale to further discuss its bitcoin spot ETF application.
On December 8, Cointelegraph reported that Grayscale and Franklin Templeton met with the SEC to review their applications, just one day after Fidelity representatives appeared before the SEC.
Meanwhile, just a few days earlier, on December 5, the SEC delayed a decision on Grayscale's Ether (eth) spot ETF application until January 24, 2024.
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