Grayscale considers potential tax implications for spot Bitcoin ETFs.
Grayscale is assessing possible tax consequences associated with spot Bitcoin (BTC) exchange traded funds (ETFs) after inaccurate reports regarding adverse tax implications were circulated.
In a series of posts to clearly stated.
We are working to obtain appropriate regulatory approvals for Uplist. $GBTC At NYSE Arca, we are considering the potential tax implications for spot Bitcoin ETFs that need to be sold. $BTC Cash reserves to fulfill stock repurchases.
Here’s why we’re talking about this now: (1/7)— Grayscale (@Grayscale) December 15, 2023
Grayscale explained that because GBTCs are structured as grantor trusts, this means that the entity setting up the trust is considered the owner of the assets and property for income and estate tax purposes.
“Cash redemptions from grantor trusts are not taxable to non-redeeming shareholders, such as individual investors,” he posted, explaining the differences from mutual funds.
“Unlike mutual funds and many other ETFs, virtually all physical commodity ETFs (e.g. gold) are structured as grantor trusts for tax purposes. We take the position that GBTC is properly treated as a grantor trust.”
Related: Brazil Signs Foreign Cryptocurrency Tax Bill
This follows recent reports that the U.S. Securities and Exchange Commission (SEC) held another meeting with Grayscale to further discuss its spot Bitcoin ETF application.
On December 8, Cointelegraph reported that Grayscale and Franklin Templeton had reviewed the application with the SEC, one day after a Fidelity representative appeared before the SEC.
Meanwhile, just a few days ago, on December 5, the SEC postponed its decision on the Grayscale Spot Ethereum ETF until January 24, 2024.
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