Grayscale's new broker dealer for Bitcoin Trust replaces Genesis

Grayscale Investments, the digital assets investment firm behind the Grayscale Bitcoin Trust (OTCMKTS: GBTC), has unveiled a new broker dealer unit that will henceforth create and issue shares of its flagship crypto trust to investors.

The new unit is dubbed Grayscale Securities, which is a wholly-owned subsidiary of Grayscale and now the latest affiliate of the Trust. The platform will take over from Genesis Global Trading, a sister company of Grayscale.

Both firms are owned by crypto-focused venture capital company Digital Currency Group.

Termination of agreement with Genesis

According to an announcement published on Monday, 3 October 2022, Grayscale Securities is a Delaware Limited Liability Company registered with US Securities and Exchange Commission (SEC) and a member of the Financial Industry Regulatory Authority (FINRA). 

Grayscale Securities is now the Authorised Participant, distributor and marketer of the bitcoin trust shares, effective 3 October 3, 2022, Grayscale noted in the document filed with SEC.

Grayscale’s formation and subsequent use as distributor and marketer, means it has terminated its agreement with Genesis, which dates back to 15 November, 2019. The company has also dropped Genesis as its Authorised Participant, ending a deal signed on 11 January 2019.

However, while Grayscale Securities takes over the two roles, Genesis will continue to be a Liquidity Provider of the Trust, according to the document.

The SEC rejected Grayscale’s application to convert its GBTC into a spot Bitcoin (BTC) exchange-traded fund (ETF) in late June this year.Grayscale sued the regulator over the denial, and as reported by Invezz, the Grayscale’s chief legal officer Craig Salm noted the litigation could drag for up to two years.