Grayscale CEO challenges SEC's denial of application

blockchain.news:

Michael Sonnenshein, CEO of Grayscale Investments, stated in a recent interview that he «can't imagine» why the United States Securities and Exchange Commission (SEC) «wouldn't want» to protect Grayscale investors and return the true asset value to them. Sonnenshein made this statement in response to a question regarding why the SEC «wouldn't want» to protect Grayscale investors.

Sonnenshein explained that the SEC «violated the administrative procedures act» by denying approval for the Grayscale Bitcoin Trust (GBTC) to be a spot Bitcoin (BTC) exchange-traded fund (ETF), in June 2022, during an interview that took place on February 25 on What Bitcoin Did, a popular podcast that is hosted by Peter McCormack. The podcast is called What Bitcoin Did.

He stated that this act ensures that the regulator does not show «favoritism» or act «arbitrarily,» adding that the SEC acted «arbitrarily» by approving Bitcoin Futures ETFs while rejecting «GBTC's conversion.» He explained that this act ensures that the regulator does not show «favoritism» or act «arbitrarily.»

Grayscale Investments saw the SEC's approval of the first Bitcoin exchange-traded funds (ETFs) as «a indication» that the SEC was «changing its approach about Bitcoin,» according to Sonnenshein's observation.

He stated that there is a «couple billion dollars» of capital that would immediately go back into investors' pockets, on a «overnight basis,» if GBTC was approved as a spot Bitcoin ETF, and that this capital would «bleed back» up to the fund's net asset value. He said this would occur if the fund was approved as a spot Bitcoin ETF (NAV).

Sonnenshein noted that this is because GBTC is now trading at a discount to its NAV. However, if it were to convert to