We advised Grayscale in the yearslong effort to secure SEC approval for the NYSE Arca listing

Davis Polk advised Grayscale Investments, LLC on the successful uplisting of Grayscale Bitcoin Trust to an exchange-traded fund, or ETF. With $26 billion in assets under management and representing approximately 3% of mined bitcoin, the trust is the largest ETF in the world offering investors exposure to bitcoin through traditional securities brokerage and retirement savings accounts.

Shares of the trust are listed on NYSE Arca under the ticker “GBTC.” Approval of the ETF application and listing does not indicate Securities and Exchange Commission approval of the investment opportunity.

Grayscale launched GBTC in 2013 through a private placement to accredited investors, and in 2014 Davis Polk began assisting Grayscale in the process of seeking approval from the SEC to uplist GBTC to a publicly traded ETF. Over the next several years, the SEC repeatedly denied ETF approval to GBTC and more than a dozen other proposed bitcoin investment vehicles. However, in the fall of 2021, the SEC granted ETF approval for funds investing in bitcoin futures contracts. In a letter soon thereafter submitted to the SEC on Grayscale’s behalf, Davis Polk explained why approval of bitcoin futures ETFs necessarily meant the SEC had to approve “spot” bitcoin ETFs such as GBTC under the governing legal standards. After the SEC nevertheless denied GBTC’s ETF application in June 2022, Davis Polk, along with co-counsel Munger Tolles & Olson, challenged the SEC’s decision in the D.C. Circuit Court of Appeals. In August 2023, the court adopted the reasoning first articulated in Davis Polk’s 2021 letter and vacated the SEC’s denial order. 

The Davis Polk capital markets team included partners Joseph A. Hall, Dan Gibbons and Hillary A. Coleman. Partners Zachary J. Zweihorn and Gabe Rosenberg provided financial institutions advice. The tax team included partners Patrick E. Sigmon and Lucy W. Farr. The investment management team included partner Gregory S. Rowland. The litigation team included partners Paul S. Mishkin and Benjamin S. Kaminetzky. Members of the Davis Polk team are based in the New York and Washington DC offices.

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