SEC filing says ETH 2.0 presents material risk to Grayscale’s Ethereum Trust. The imminent transfer of Ethereum ( ETH) to the proof-of – stake consensus poses a danger that could have a “material adverse affect” on its shares, according to the most recent SEC disclosure by the Grayscale Ethereum Trust, or ETHE.
The ETHE recently filed an application with the regulator to become an SEC-reporting company. Companies of this nature are required to discuss the risk factors that may have an adverse impact on the their performance within all quarterly and annual reports.
One section, meant to outline potential risks for the fund’s future, outlines that the upgrade to ETH 2.0 may present certain difficulties for investors “A digital asset network’s consensus mechanism is a material aspect of its source code, and any failure to properly implement such a change could have a material adverse effect on the value of ETH and the value of the Shares.”
The imminent upgrade has so far not detracted from the interest of investors in the fund. Conversely, the Trust’s assets under management have grown exponentially over the past year, from $67 million at the time of publishing to over $800 million. Although the price of ETH over this time period has roughly doubled, ETHE holdings have risen more than tenfold.
[image: Nick Chong]