United States securities and exchange commission logo
October 21, 2021
Michael Sonnenshein
Chief Executive Officer
Grayscale Bitcoin Cash Trust (BCH)
290 Harbor Drive, 4th Floor
Stamford, CT 06902
Re: Grayscale Bitcoin
Cash Trust (BCH)
Amendment No. 2 to
Registration
Statement on Form 10
Filed September 22,
2021
File No. 000-56308
Dear Mr. Sonnenshein:
We have reviewed your amended filing and have the following
comments. In some of
our comments, we may ask you to provide us with information so we may
better understand your
disclosure.
Please respond to these comments within ten business days by
providing the requested
information or advise us as soon as possible when you will respond. If
you do not believe our
comments apply to your facts and circumstances, please tell us why in
your response.
After reviewing your response and any amendment you may file in
response to these
comments, we may have additional comments. Unless we note otherwise, our
references to prior
comments are to comments in our September 8, 2021 letter.
Exhibit 99.1
Overview
The Trust and the Shares, page 4
1. Refer to your response
to comment 4. Please disclose here the circulation supply of
Bitcoin and BCH.
Risk Factors
Risk Factors Related to the Regulation of the Trust and the Shares
A determination that BCH or any other digital asset is a "security",
page 36
2. We note that in
response to comment 2, you provided a legal memorandum from counsel
Michael Sonnenshein
Grayscale Bitcoin Cash Trust (BCH)
October 21, 2021
Page 2
to the Sponsor rather than an opinion of counsel. Please revise your
risk factor disclosure
on page 36 to explicitly state, if true, that you were unable to
obtain an opinion of counsel
that BCH is not a security under Section 2(a)(1) of the Securities Act
due to the fact-
dependent nature of the analysis and the difficulty in obtaining and
verifying the relevant
facts.
Constituent Exchange Selection, page 52
3. We note your response to our prior comment 14 and your disclosure on
page 53 that the
Index Provider is not required to publicize or explain the addition or
removal of
Constituent Exchanges or to alert the Sponsor to such changes. Please
tell us why, if true,
you will not inform investors of a material change to the Constituent
Exchanges by filing
a current report, or disclose here that you will do so.
Determination of the Index Price, page 53
4. Refer to your response to comment 18. Please tell us whether the Index
Price
methodology is publicly available to investors. Please also confirm,
as previously
requested, that you have provided a materially complete description of
the Index Price
methodology.
BCH Value
Determination of the Index Price When the Index Price is Unavailable, page 55
5. Refer to your response to comment 16. In the second rule on page 55,
you state that the
Digital Asset Exchanges include the Constituent Exchanges. Please
clarify whether
exchanges that are not Constituent Exchanges may be selected, and, if
so, disclose the
criteria for a digital asset exchange to be used as a Source in the
second rule.
We remind you that the company and its management are responsible for
the accuracy
and adequacy of their disclosures, notwithstanding any review, comments, action
or absence of
action by the staff.
You may contact Ben Phippen at 202-551-3697 or Amit Pande, Accounting
Branch
Chief, at 202-551-3423 if you have questions regarding comments on the
financial statements
and related matters. Please contact Sonia Bednarowski at 202-551-3666 or Justin
Dobbie at 202-
551-3469 with any other questions.
FirstName LastNameMichael Sonnenshein Sincerely,
Comapany NameGrayscale Bitcoin Cash Trust (BCH)
Division of
Corporation Finance
October 21, 2021 Page 2 Office of
Finance
FirstName LastName