Grayscale Investments CEO Michael Sonnenshein said he “can’t imagine” why the United States Securities and Exchange Commission (SEC) “doesn’t want” to protect Grayscale’s investors and return true asset value, in a recent podcast interview.
In an interview with What Bitcoin Did, a popular podcast hosted by Peter McCormack, on February 25, Sonnenshein explained that the SEC “violated administrative procedures” by denying Grayscale Bitcoin Trust (GBTC) to be a point of approval for Bitcoin (BTC). exchange-traded fund (ETF), in June 2022.
He explained that this action ensures that the regulator does not show “favoritism,” or act “arbitrarily,” adding that by approving the Bitcoin Futures ETF, while rejecting “GBTC conversion,” the SEC has acted “arbitrarily.”
Sonnenshein noted that when the SEC began approving the first Bitcoin ETF, Grayscale took it “as a sign” that the SEC was “changing its attitude toward Bitcoin.”
He said there would be “several billion dollars” of capital that would go straight back into investors’ pockets, overnight, as the fund would “fall back down” to its net asset value, once approved as a point. Bitcoin ETF.
Sonnenshein explained that this is because GBTC currently trades at a discount to net-asset-value (NAV), but if it is converted to an ETF, there is “no more” discount or premium. into an embedded “arbitration mechanism”.
He reiterated that Grayscale is in the process of “suing the SEC right now,” and could have a decision challenging the SEC’s rejection of the initial application as late as “fall 2023.”
He also noted that Grayscale has more than “millions of investor accounts,” with investors around the world trusting the company to “do the right thing for them.”
Sonnenshein “can’t imagine” why the SEC doesn’t want to “protect investors” and “return value” to them.
It is noted that Grayscale will not “shy” from the fact that it has a “commercial interest” in this agreement, with Sonnenshein noting that if the application to challenge the SEC is rejected, Grayscale may be able to appeal the case. in the US Supreme Court.
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This happened after the SEC filed a 73-page brief with the US Court of Appeals for the District of Columbia Circuit in December 2022 outlining the reasons for rejecting Grayscale’s request to convert the $12 billion Bitcoin Trust into a spot-based Bitcoin ETF in June 2022.
The SEC based its decision on findings that Grayscale’s proposal did not adequately protect against fraud and manipulation.
The agency has made similar findings in several previous applications to create spot-based Bitcoin ETFs.