GBTC approval could return a few billion dollars for investors: Grayscale CEO

Grayscale Investments CEO Michael Sonnenshein said he “can’t imagine” why the US Securities and Exchange Commission (SEC) “wouldn’t want to” protect Grayscale investors and return the asset’s true value to them, in a recent podcast interview.

In an interview with What Bitcoin Did, a popular podcast hosted by Peter McCormack, on Feb. 25, Sonnenshein explained that the SEC “violated administrative procedure law” by denying that the Grayscale Bitcoin Trust (GBTC) was an approved spot Bitcoin (BTC) ) exchange-traded fund (ETF) in June 2022.

He explained that this act ensures that the regulator does not show “favoritism” or act “arbitrarily”, adding that by approving the Bitcoin Futures ETF and not approving the “GBTC conversion”, the SEC acted “arbitrarily”.

Sonnenshein noted that when the SEC started approving the first Bitcoin ETFs, Grayscale took it “as a sign” that the SEC was “really changing its attitude towards Bitcoin.”

He stated that there is actually “a few billion dollars” of capital that would immediately go back into investors’ pockets overnight as the fund would “return” to its net asset value upon approval as a Bitcoin spot. ETF.

Sonnenshein explained that this is because GBTC currently trades at a discount to its net asset value (NAV), but if it was converted to an ETF, “there would be no more” discount or premium, there would be a “return mechanism”. arbitration” built-in.

He reiterated that Grayscale is in the process of “suing the SEC now” and could have a ruling challenging the SEC’s denial of its initial filing by “Fall 2023.”

He also noted that Grayscale has more than a “million investor accounts,” with investors around the world relying on the company to “do the right thing for them.”

Sonnenshein “can’t imagine” why the SEC wouldn’t want to “protect investors” and “return that value” to them.

It was noted that Grayscale will not “shirk” the fact that it has a “commercial interest” in this approval, with Sonnenshein noting that if the SEC’s motion to challenge is denied, Grayscale will be able to appeal the case. on the Supreme Court of the United States.

Related: SEC’s ‘One-Dimensional’ Approach Is Slowing Bitcoin’s Progress: Grayscale CEO

This comes after the SEC denied Grayscale’s request to convert its $12 billion Grayscale Bitcoin Trust (GBTC) into a spot-based Bitcoin ETF in December 2022, basing its decision on findings that Grayscale’s proposal did not sufficiently protected against fraud and manipulation.

The agency has made similar findings in several previous applications to create spot-based BTC ETFs.