Grayscale mulls over potential tax implications for spot Bitcoin ETFs

Grayscale is evaluating the potential tax penalties related to spot Bitcoin (BTC) exchange-trade funds (ETF), prompted by inaccurate reviews circulating about unfavorable tax implications.

In a sequence of posts on X (previously Twitter), Grayscale clarifies that retail buyers of the Grayscale Bitcoin Belief (GBTC) should not anticipated to incur tax implications when the fund sells Bitcoin to generate money for assembly share redemptions.

As we work to acquire the suitable regulatory approvals to uplist $GBTC to NYSE Arca, we’re contemplating the potential tax implications for spot Bitcoin ETFs needing to promote $BTC holdings for money to satisfy share redemptions.
Right here’s why we’re speaking about this now. (1/7)

— Grayscale (@Grayscale) December 15, 2023

It’s because GBTC is structured as a grantor belief, signifying that the entity establishing the belief is considered the proprietor of the property and property for earnings and property tax issues.

“Money redemptions of grantor trusts should not taxable occasions for non-redeeming shareholders like retail buyers,” the publish acknowledged, whereas explaining its distinction to mutual funds:

“Not like mutual funds and lots of different ETFs, considerably all spot commodity ETFs (e.g., gold) are structured to be grantor trusts for tax functions. We take the place that GBTC is correctly handled as a grantor belief.”

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This follows latest reviews indicating that the US Securities and Alternate Fee (SEC) held one other assembly with Grayscale to delve focus on  spot Bitcoin ETF.

On December 8, Cointelegraph reported that Grayscale and Franklin Templeton sat down with the SEC to overview their purposes, solely a day after representatives from Constancy appeared earlier than the SEC.

In the meantime, simply days earlier than, on December 5, the SEC pushed again the decision on Grayscale spot Ethereum ETF. This was pushed again till January 24, 2024.

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