Grayscale Tightens NEAR ETF Custody Language as AI Crypto Demand Rises

Grayscale Investments filed an amended registration for a spot NEAR ETF this month, and the changes center on custody. The revised document spells out more clearly who would hold the fund's underlying NEAR Protocol assets and how those assets would be managed.

Custody has blocked more spot crypto ETF applications than any other issue. SEC rejection letters for earlier Bitcoin spot products cited insufficient surveillance-sharing agreements and unclear custodian safeguards, the filings show. Grayscale's Bitcoin ETF eventually cleared that bar after a court ruling, and the NEAR amendment borrows from the same approach.

The amended registration does not name a specific custodian. That leaves a hole. Big allocators need to know who holds the private keys and under which legal framework. Without a named entity, some institutional money will stay on the sidelines. The fact that Grayscale revised the custody section at all signals a deliberate push to pre-empt SEC comment letters, people familiar with ETF filings said. Firms that leave details vague often get sent back for revisions.

NEAR Protocol is a layer-1 blockchain that positions itself as a platform for AI-related computation. The timing is not incidental. Investor interest in tokens with an artificial intelligence angle has picked up, and several asset managers have filed for spot ETFs on assets beyond Bitcoin and Ethereum. Grayscale's filing suggests it believes NEAR can clear regulatory hurdles if the custody question is answered cleanly.