Grayscale Sui Trust's OTCQX Listing and the Path to ETP Conversion: Strategic Implications for Blockchain Access

Grayscale Sui Trust's (GSUI) recent listing on the OTCQX Best Market marks a pivotal moment in the evolution of institutional and retail access to next-generation blockchain protocols. By transitioning from private placements to a public market vehicle, Grayscale is signaling its intent to democratize exposure to Sui, a Layer 1 blockchain designed for scalability and developer efficiency. However, the path to converting GSUI into an Exchange-Traded Product (ETP) remains fraught with regulatory hurdles, raising critical questions about the future of crypto-based investment vehicles and their accessibility to a broader investor base.

The OTCQX Listing: A Strategic Bridge to Public Markets

Grayscale Sui Trust began trading on the OTCQX Best Market on November 20, 2025, under the ticker GSUI. This move follows a private placement model that restricted access to accredited investors since August 2024. The OTCQX platform, as noted by OTC Markets Group, offers a balance of streamlined compliance requirements and high governance standards, making it an attractive intermediate step for firms seeking to transition to more liquid markets. For Sui-a blockchain protocol emphasizing high throughput and low latency-the OTCQX listing provides a regulated on-ramp for investors who might otherwise lack the technical or financial infrastructure to engage directly with the asset.

However, the trust's structure remains a double-edged sword. While it avoids the complexities of direct token custody, it also imposes a 2.50% total expense ratio, significantly higher than traditional ETPs. This fee structure, combined with the trust's exclusive availability to accredited investors, limits its utility for retail participants. For institutional investors, though, the trust offers a familiar security wrapper for exposure to a protocol that Grayscale positions as a "next-gen" alternative to Ethereum.

Regulatory Hurdles and the ETP Conundrum

The SEC's Generic Listing Standards for commodity-based trusts have emerged as a critical barrier to GSUI's potential conversion into an ETP. According to Ambcrypto, Grayscale has explicitly stated it will pursue ETP status once SUI meets these standards. This mirrors the SEC's recent pause on Grayscale's Digital Large Cap Fund (GDLC) ETF conversion, underscoring the agency's cautious approach to multi-asset crypto products. The SEC's reluctance appears rooted in a desire to establish comprehensive frameworks for token-based ETFs before approving diversified baskets, a stance that prioritizes investor protection over rapid innovation.

For retail investors, the absence of an ETP means continued exclusion from a product that could offer greater liquidity and transparency. Unlike the trust, ETPs typically trade on regulated exchanges with real-time pricing and lower fees, making them more accessible to individual investors. Institutional players, meanwhile, may prefer the current trust structure due to its alignment with existing private fund regulations, even as they advocate for broader reforms. The SEC's December 2025 compliance deadline for Regulation S-P and the FTC Safeguards Rule further complicates the landscape, creating uncertainty for both issuers and investors.

Comparative Trends and Strategic Implications

Grayscale's strategy with Sui aligns with broader trends in blockchain investment. For instance, the firm's aggressive accumulation of Chainlink (LINK) tokens-surpassing 1.3 million as of November 2025-highlights its focus on infrastructure protocols with long-term utility. A parallel can be drawn with Sui, which Grayscale markets as a scalable solution for decentralized finance (DeFi) and tokenized assets. The recent filing for a spot LINK ETF, alongside Bitwise's similar proposal, suggests that regulatory clarity for specific tokens may precede broader multi-asset approvals.

The transition from private trusts to public ETPs also reflects a maturing institutional landscape. Kraken's $1.5 billion acquisition of NinjaTrader and advancements in stablecoin development underscore growing confidence in crypto's role within traditional finance. Yet, for retail investors, the path remains uneven. While declining prices and potential ETF listings create entry points, the lack of ETP conversion for GSUI means retail access to Sui will remain limited until regulatory standards evolve(https://www.bitget.com/news/detail/12560605073518).

Conclusion: Balancing Innovation and Regulation

Grayscale Sui Trust's OTCQX listing is a strategic bridge between private and public markets, but its full potential will only be realized through ETP conversion. The SEC's Generic Listing Standards, while a hurdle, also serve as a catalyst for industry-wide clarity-a necessary step for legitimizing blockchain protocols as mainstream assets. For institutional investors, the current trust model offers a regulated, albeit exclusive, pathway to Sui. For retail participants, the absence of an ETP underscores the need for regulatory reforms that balance innovation with investor protection.

As Grayscale navigates this regulatory maze, the broader crypto ecosystem must grapple with a fundamental question: How can next-gen protocols like Sui achieve mass adoption without sacrificing the security and transparency that institutional investors demand? The answer may lie in a hybrid approach-one that leverages the strengths of both private trusts and public ETPs while aligning with evolving regulatory expectations.