Grayscale's Ethereum Trust Product Is Now Trading on OTC Markets

Digital Currency Group (DCG) subsidiary Grayscale Investments has introduced an Ether (ETH)-based security product called Grayscale Ethereum Trust (ETHE) that's now tradable through over-the-counter (OTC) markets. Grayscale’s blog post (published on June 20, 2019) also notes that ETHE is “an open-ended trust that holds Ethereum.”

“Open-Ended Trust” for Holding Ether

This means that investors looking to gain exposure to Ether need not hold the underlying cryptoasset itself. This, as Grayscale’s ETHE product is the “first U.S.-based publicly quoted security solely invested in and deriving value from the price” of Ethereum’s native token, ETH.

Gaining Exposure to Opportunities that Aren’t Correlated to Traditional Assets

Commenting on the launch of the investment manager’s latest product, Matt Beck, the Director of Investments and Research at Grayscale, remarked:

Cryptocurrencies — such as Ethereum — offer exposure to a unique set of market opportunities and risks that are uncorrelated to traditional assets. As a result, they can further diversify modern portfolios, enhancing returns per unit of risk (when positions are sized appropriately and maintained over long investment horizons).

In May 2019, Grayscale had reportedly obtained approval to list ETH in OTC markets from the Financial Industry Regulatory Authority (FINRA), a non-profit regulatory agency licensed by the US Congress.

Morgan Creek CEO Confirms Cryptoassets Not Correlated to Traditional Investments

Notably, Beck’s views regarding digital asset investments are similar to those expressed by Mark Yusko, the CEO at Morgan Creek Capital, who in May 2019 said that investors should now seriously consider adding Bitcoin (BTC) to their investment portfolio. This, as the experienced Wall Street investor believe bitcoin has a very low correlation with the performance of traditional assets - thus having (statistically) high diversification.

Grayscale Holding 203,000 Bitcoins

Grayscale’s total assets under management are presently valued at over $2.3 billion. This makes it one of the largest digital cryptoasset investment firms. In early December 2018, the management at Grayscale had revealed that it is holding over 203,000 BTC (appr. $2.25 billion at current prices) in its reserves.

A report from Longhash had confirmed (at that time) that Grayscale was the largest institutional holder of BTC - with the company controlling around 1% of bitcoin’s circulating supply of approximately 17.7 million.

$3.2 Million Worth of Ether from the Upbit Hack Have Reportedly Been Laundered

A total of $3.2 million worth of ether stolen from the popular South Korean cryptocurrency exchangE Upbit have reportedly already been laundered via small transactions sent to various other cryptocurrency exchanges.

According to a recently published report, citing data from Uppala Security’s Sentinel Protocol, a total of 20,520 ETH that was stolen from the cryptocurrency exchange has already been laundered, as the address to which the stolen funds were initially sent to has moved them and sent small transactions to various other trading platforms.

Per the report, these trading platforms including exchanges like Binance, Huobi, Bittrex, Bitfinex, and several decentralized exchanges. Uppsala’s President Patrick Kim was quoted in the report saying it believes the hackers are still looking to launder the rest of the 342,000 stolen ETH.

We believe that the hackers continue to launder money through exchanges without any sanctions standing in their way.

As CryptoGlobe reported, in November of last year the South Korean exchange Upbit confirmed hackers managed to steal about $49 million worth of Ethereum from its hot wallet, and quickly reacted to the situation by moving all cryptoasset from its hot to its cold wallets.

The exchange also suspended deposits and withdrawals to look into the situation, and only reopened them for Ethereum earlier this week after improving its security. Users were told to update their wallets and not send them to the old address as it could lead to a complicated and costly recovery process.

The original address the hacked ETH was moved to now holds less than $10 worth of the cryptocurrency, while some addresses associated with the theft still hold large amounts. While some speculated the small transactions to exchanges were simply a test, Kim claimed the transactions had the sole purpose of laundering the funds.

Featured image via Pixabay.