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A filing with the U.S. Securities and Exchange Commission this week shows Goldman will expand its crypto offering to include Ethereum for big-money investors.
Key points
- Filings with the SEC show Goldman Sachs will provide access to Ethereum for its largest investors with a minimum deposit of $250,000.
- Last June, Goldman offered a Bitcoin futures vehicle to top clients.
- Nothing in the documents suggest any such offerings are in the works for everyday investors looking to access crypto.
According to public filings this week with the SEC, Goldman Sachs plans to offer its largest banking clients access to Ethereum’s digital coin Ether (ETH) through a third-party issuance from Galaxy Digital.
This is not the first foray into cryptocurrency investment offerings for Goldman. Last June, the investment banking firm also partnered with Galaxy Digital to launch and manage Goldman’s Bitcoin futures offering.
Details of Goldman’s Ethereum investment option
According to the amended Form D filing, the “Galaxy Institutional Ethereum Fund” launched in February 2021 with a minimum initial investment of $250,000, basically limiting access to institutional players. The SEC documents further outlined that 28 clients were enrolled in the fund at the time of the filing, with invested assets totaling more than $50 million.
While Goldman was not linked to Galaxy’s ETH fund when it launched, the filing noted that Goldman will get an undisclosed sum as a finder’s fee for accounts it sends to Galaxy that sign up going forward, “Goldman Sachs & Co. LLC will receive an introduction fee with respect to certain clients introduced to Issuer; CAIS Capital LLC will receive certain placement fees with respect to clients referred to Issuer, each as disclosed to their applicable clients,” the filing stated.
While Galaxy Digital seems to have cracked the SEC code to offer cryptocurrencies to large clients, other efforts have not been as successful.
SEC has been picky about allowing mainstream access to crypto
Last November, the SEC rejected a proposal by VanEck for a Bitcoin exchange-traded fund (ETF) that would have held the actual crypto rather than just Bitcoin futures. Submitted in March, the application sought to buy Bitcoin directly on the “spot” market and hold it in an ETF that investors could then buy into.
While the SEC did allow two Bitcoin futures-based ETFs to begin trading in October 2021, it would not authorize an ETF containing actual Bitcoin, citing in its 51-page report its frequent worries of possible manipulation and fraud, etc within the crypto market. As context, a futures-based ETF invests in indirect contracts to buy or sell an asset at a set date in the future.
It’ll be interesting to see if this week’s executive order from President Joe Biden that tasked most federal agencies — including the SEC — to study and ultimately implement crypto regulation will loosen or limit access to these types of investment options in the future for individual investors.
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