Grayscale Investment files for rights to ETHPoW tokens following Ethereum’s Merge

Following Ethereum’s merge, Grayscale Investments now has the legal ability to issue Ethereum Proof of Work tokens to holders in the form of cash, the asset manager said in a Securities and Exchange Commission (SEC) filing on Friday.

Grayscale aiming rights to ETHPoW

On Thursday, when Ethereum switched to proof of stake, ETHPoW, a fork of the proof of work Ethereum chain, went live. The Grayscale Digital Large Cap Fund and the Grayscale Ethereum Trust were given ownership rights to ETHPoW tokens as a result of the fork. The former has rights to about 41,000 ETHPoW tokens, while the latter has rights to about 4 million. The filing reads, “there is uncertainty as to whether digital asset custodians will support ETHPoW tokens or if trading markets with meaningful liquidity will develop.” 

As the Ethereum Proof of Work Network is so fresh, there are not many well-established trading platforms for ETHPoW tokens, according to the filing. It is expected that the price of ETHPoW tokens will fluctuate.

“In the event digital asset custodians do support ETHPoW tokens and trading markets do develop, it is expected that there will be widely fluctuating values for ETHPoW tokens for some time,” Grayscale stated in the filing. “As a result of this uncertainty and the potential for significant volatility in prices it is not possible to predict the value of rights to ETHPoW tokens, if any.”

According to the filing, upcoming forks or airdrops on the Ethereum Network will be analyzed on an individual basis, and it is possible that they may not be handled in the same way as the ETHPoW fork was.

Those who owned shares of each fund as of the end of business on September 26 would be eligible to receive any proceeds.

Notably, the Grayscale’s filing with the SEC comes at a time when the two entities are already on a legal fight against each other. Notably, the company is now fully embroiled in a lawsuit after the regulatory agency denied his proposal to convert GBTC to spot BTC ETF.