{"id":26693,"date":"2023-12-16T05:56:34","date_gmt":"2023-12-16T05:56:34","guid":{"rendered":"https:\/\/nftandcrypto-news.com\/crypto\/grayscale-mulls-over-potential-tax-implications-for-spot-bitcoin-etfs\/"},"modified":"2023-12-16T05:56:37","modified_gmt":"2023-12-16T05:56:37","slug":"grayscale-mulls-over-potential-tax-implications-for-spot-bitcoin-etfs","status":"publish","type":"post","link":"https:\/\/nftandcrypto-news.com\/crypto\/grayscale-mulls-over-potential-tax-implications-for-spot-bitcoin-etfs\/","title":{"rendered":"Grayscale mulls over potential tax implications for spot Bitcoin ETFs"},"content":{"rendered":"

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Grayscale is evaluating the possible tax consequences associated with spot Bitcoin (BTC) exchange-trade funds (ETF), following inaccurate reports circulating about unfavorable tax implications.<\/p>\n

In a series of posts on X (formerly Twitter), Grayscale clarifie that retail investors of the Grayscale Bitcoin Trust (GBTC) are not expected to incur tax implications when the fund sells Bitcoin to generate cash for meeting share redemptions.<\/p>\n

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As we work to obtain the appropriate regulatory approvals to uplist $GBTC<\/a> to NYSE Arca, we\u2019re considering the potential tax implications for spot Bitcoin ETFs needing to sell $BTC<\/a> holdings for cash to fulfill share redemptions.
Here\u2019s why we\u2019re talking about this now. (1\/7)<\/p>\n

\u2014 Grayscale (@Grayscale) December 15, 2023<\/a><\/p><\/blockquote>\n

Grayscale explained this is due to the GBTC is structured as a grantor trust, which means the entity establishing the trust is regarded as the proprietor of the assets and property for income and estate tax purposes.<\/p>\n

\u201cCash redemptions of grantor trusts are not taxable events for non-redeeming shareholders like retail investors,\u201d the post stated,while explaining its difference from mutual funds:<\/p>\n

\u201cUnlike 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 is properly treated as a grantor trust.\u201d<\/p><\/blockquote>\n

Related: Brazil signs overseas crypto tax bill into law<\/em><\/strong><\/p>\n

This follows recent reports indicating that the United States Securities and Exchange Commission (SEC) held another meeting with Grayscale to further discuss its spot Bitcoin ETF application.<\/p>\n

On December 8, Cointelegraph reported that Grayscale and Franklin Templeton sat down with the SEC to review their applications, only a day after representatives from Fidelity appeared before the SEC.<\/p>\n

Meanwhile, just days before, on December 5, the SEC pushed back the decision on Grayscale spot Ethereum ETF until January 24, 2024.<\/p>\n

Magazine: This is your brain on crypto: Substance abuse grows among crypto traders<\/em><\/strong><\/p>\n<\/div>\n