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Grayscale Eyes Public Listing with New "GRSM" Trust Amid SEC Scrutiny

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  Published in Stocks and Investing on Friday, November 14th 2025 at 1:19 GMT by CoinTelegraph

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Grayscale’s IPO Ambitions and the U.S. SEC’s Asset‑Management Regime: A Deep Dive

Grayscale Investments, the crypto‑asset manager that has long been a bellwether for the digital‑currency market, has once again found itself at the center of a regulatory tug‑of‑war. In a series of recent filings and press releases, the firm announced a bold move to take its core business public, a step that could reshape the way institutional investors engage with cryptocurrencies. Yet, the United States Securities and Exchange Commission (SEC) – which has been tightening its grip on crypto‑asset management – is poised to be a decisive factor in whether that public offering can go forward. The story, chronicled in Cointelegraph’s latest coverage, is a fascinating intersection of market ambition, regulatory evolution, and the practical realities of launching a crypto‑asset fund on the capital markets.

The Announcement: Grayscale’s Public‑Market Debut

In an unprecedented announcement that has drawn eyes from Wall Street to the cryptocurrency community, Grayscale disclosed that it plans to spin off its “Asset Management” arm into a separate, publicly traded entity. The proposed vehicle would be a closed‑ended investment trust that trades on a U.S. exchange, allowing investors to gain exposure to the firm’s flagship funds—most notably the Bitcoin Trust (GBTC) and the Ethereum Trust (ETHE). The new company would be listed under the ticker “GRSM,” with an initial offering price pegged at $22 per share, valuing the enterprise at roughly $2.5 billion.

Grayscale’s decision follows a decade of successful management of digital‑asset products, boasting assets under management (AUM) that topped $60 billion as of Q1 2024. By going public, the firm hopes to leverage the liquidity and transparency of traditional equity markets, potentially unlocking new capital and expanding its reach beyond the existing pool of accredited investors and institutions.

How the SEC’s Asset‑Management Rules Interfere

While the announcement was celebrated by some market participants, the SEC’s Asset‑Management (AM) rule, promulgated in March 2023, immediately entered the picture. The rule expands the SEC’s oversight over “crypto‑asset managers” (CAMs) who offer a “public investment vehicle” (PIV) to U.S. investors. Under the rule, these managers must register with the SEC and comply with a broad suite of disclosure, governance, and fiduciary standards that are typically applied to mutual funds and ETFs.

Key points from the AM rule that will directly affect Grayscale’s IPO include:

1. Registration Requirement: Grayscale must file a registration statement with the SEC that discloses its investment strategy, risk factors, and the structure of the new public vehicle. Failure to do so would render the offering unlawful.

2. Fiduciary Duty: The rule imposes a fiduciary duty on the managers to act in the best interests of the fund’s investors. This is a significant shift from the more permissive “principal‑agent” relationship that has historically governed many crypto‑asset products.

3. Corporate Governance: The AM rule mandates a board structure that includes independent directors and a compliance officer, along with formal processes for conflicts of interest. Grayscale’s current board, heavily tilted toward its founding team, will need to adjust to these requirements.

4. Investment Policies: The new public vehicle must maintain an investment policy that is consistent with the disclosure in its registration statement. This includes limits on the types of crypto assets held, as well as risk‑management protocols.

5. Reporting: Quarterly and annual reports to shareholders will have to conform to SEC standards, providing detailed performance, holdings, and operational data.

The SEC’s enforcement of these provisions could lengthen the timeline for the IPO, impose additional costs, and require structural changes to Grayscale’s existing governance.

The Road Ahead: From SPAC to Exchange Listing

Grayscale’s IPO strategy has been multi‑faceted. Initially, the firm filed a form 10‑K for a “SPAC‑type” transaction—an approach that had previously proved successful for other crypto asset managers like Fidelity Digital Assets and Bitwise. A SPAC (Special Purpose Acquisition Company) would allow Grayscale to merge its newly formed public entity with an existing SPAC that has already been listed, accelerating the path to public markets.

However, the SEC’s AM rule effectively prohibits any public investment vehicle that does not register, regardless of the mechanism (SPAC or direct listing). Consequently, Grayscale must navigate the SPAC route while simultaneously ensuring full compliance with the AM rule. This dual approach could be a litmus test for how crypto‑asset managers can reconcile private‑sector growth strategies with the SEC’s new regulatory framework.

Market Implications: More Than Just One Company

Grayscale’s move could signal a broader shift in the crypto‑asset landscape. If the firm successfully registers and lists its public vehicle, it will demonstrate that the SEC’s AM rule can coexist with traditional capital‑market mechanisms. This could embolden other crypto‑asset managers to pursue similar public‑market offerings, potentially expanding institutional access to digital‑assets. Conversely, a failure or prolonged delay might reinforce the SEC’s cautionary stance and drive the industry toward more tightly regulated, privately‑offered products.

Investor Take‑aways

• Valuation Concerns: While Grayscale’s AUM is impressive, the valuation at $22 per share may appear high given the volatility of crypto markets. Institutional investors will likely scrutinize the firm’s ability to generate consistent returns.

• Regulatory Uncertainty: The SEC’s enforcement of the AM rule remains dynamic. Grayscale’s success will depend on the pace and scope of the SEC’s regulatory interpretation.

• Governance Overhaul: The requirement for independent directors and a compliance officer could dilute Grayscale’s current control structure. Investors may see this as a positive step toward transparency.

• Liquidity: A public listing could increase liquidity for existing shareholders, especially for those holding GBTC shares that have historically traded at a significant premium or discount to NAV.

Conclusion

Grayscale’s announced IPO marks a watershed moment for the crypto‑asset management industry. It embodies the ambition of a leading firm to bring digital‑assets into the mainstream of public‑market investing, while simultaneously confronting the SEC’s newly expanded regulatory reach. The interplay between Grayscale’s business strategy and the SEC’s Asset‑Management rule will set precedents that could either accelerate or slow the integration of crypto‑assets into institutional portfolios.

As the firm prepares to file its registration statement, investors, regulators, and competitors alike will be watching closely. Whether Grayscale can successfully navigate the regulatory maze will determine not just the fate of its own public offering, but also the broader trajectory of crypto‑asset investment vehicles in the United States.