Grayscale has kept the distribution process of the ETH Trust shares pretty straightforward for all the existing ETHE shareholders. The ETHE shareholders won’t need to initiate any extra action to receive the ETH trust shares.
By Bhushan Akolkar
Edited by Julia Sakovich
Updated
2 mins read
Cryptocurrency asset manager Grayscale has stated that they would start distributing the shares of the Grayscale Ethereum Mini-Trust to the shareholder of the Grayscale Ethereum Trust (ETHE) starting next from July 18 onwards.
All the ETHE shareholders will receive the shares of the new ETH Trust in a 1:1 ratio. Furthermore, Grayscale also plans to contribute nearly 10% of ETHE’s Ether holdings to the new trust.
Grayscale has expressed its intentions to list the ETH Trust on the NYSE Arca under the “ETH” ticker symbol. Of course, this will be subject to regulatory approval from the SEC. Listing the Grayscale Ethereum Mini-Trust on NYSE would potentially provide liquidity as well as accessibility for Ethereum investors.
Grayscale has kept the distribution process of the ETH Trust shares pretty straightforward for all the existing ETHE shareholders. The ETHE shareholders won’t need to initiate any extra action to receive the ETH trust shares. They also don’t need to pay any consideration, exchange, or surrender any existing shares.
After the record date, ETHE shares will trade ex-distribution rights for ETH Trust shares, with the distribution date scheduled for no earlier than July 19, 2024.
Grayscale has outlined some specific conditions, necessary to meet, before the distribution of the ETH Trust shares. These prerequisites include the filing and approval of registration statements on Forms 8-A and S-1 for the ETH Trust, along with securing listing approval on NYSE Arca. Despite establishing a timeline, Grayscale cautions that the distribution may not proceed as planned due to regulatory considerations.
Considering the tax angle, Grayscale believes that neither the ETHE shareholders nor the trust itself will incur any taxable gains or losses for US federal income tax purposes related to the distribution. However, Grayscale advises the shareholders to seek guidance from their tax advisors pertaining to individual tax implications, in order to avoid any conflicts.
This announcement comes amidst Ethereum’s pivotal role in the digital asset sector, catering to investor demands for targeted investment opportunities within the cryptocurrency landscape.
Interestingly, the distribution of ETH Trust shares will coincide with the launch of the spot Ethereum ETF likely to happen around July 15. The Ethereum price has bounced back once again above $3,000 after facing a huge sell-off on Monday.
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Bhushan is a FinTech enthusiast and holds a good flair in understanding financial markets. His interest in economics and finance draw his attention towards the new emerging Blockchain Technology and Cryptocurrency markets. He is continuously in a learning process and keeps himself motivated by sharing his acquired knowledge. In free time he reads thriller fictions novels and sometimes explore his culinary skills.
