And after all that people will not be buying an actual bitcoin (or possessing private keys) just a promise from Winklevi that they hold bitcoin in equal amounts somewhere to back their deposits ... what are the rules on taking delivery of btc? They probably couldn't do that without becoming a "money transmitter"
Issuance of new shares and redemption of existing shares is only in baskets of 50,000 shares (10,000 BTC). The process outlined in the S-1 is very similar to physical gold ETFs. To be issued new shares (as opposed to buying shares on market) one needs to deliver 10,000 BTC to the trustee. The trustee will then issue a new basket of 50,000 shares and transfer them to the depositor. To redeem shares the same thing applies, one must have 50,000 shares and can then take delivery of 10,000 BTC.
Like in other similar ETFs the overwhelming majority of investors will never make a deposit or redeem shares, and will just trade existing shares on the market.
As for MT regs. There are various exemptions for MT regulations including registered broker dealers and deposit institutions. I would imagine the fund would use an exempt entity or become an agent of an existing MT rather than try to become licensed as a MT in all jurisdictions.
