Grayscale Investments boss Michael Sonnenshein said that if GBTC gets the green light to "convert" into a spot bitcoin ETF, there will be "no longer" a discount or premium in the ongoing legal battle against the SEC. In a recent interview, Grayscale Investments CEO Michael Sonnenshein said he “can’t imagine” why the U.S. Securities and Exchange Commission (SEC) “wouldn’t want” to protect Grayscale investors and return real asset value to them.
In a Feb. 25 interview on What Bitcoin Has Done, a popular podcast hosted by Peter McCormack, Sonnenshein explained that the SEC refused to approve the Grayscale Bitcoin Trust (GBTC) as spot bitcoin, " Violation of the Administrative Procedure Act” Exchange Traded Funds (ETFs), June 2022.
He explained that the bill ensures that regulators do not exhibit “partisanship” or “arbitrary” behavior, adding that the SEC acted “arbitrarily” by approving a bitcoin futures ETF while denying “the conversion of GBTC.” Sonnenshein noted that when the SEC began approving the first bitcoin ETFs, Grayscale “viewed it as a sign” that the SEC was “changing their stance on bitcoin.”
He said that if GBTC were approved as a spot bitcoin ETF, "billions of dollars" would be immediately returned to investors' pockets "overnight" as the fund would "flow back" to its net asset value ( NAV).
Sonnenshein explained that this is due to the fact that GBTC currently trades below its net asset value, but if converted to an ETF, there would be “no longer” a discount or premium; an “arbitrage mechanism” would be embedded.
He reiterated that Grayscale is "sueling the SEC now" and could make a decision as early as "fall 2023" challenging the SEC's decision to deny its original application.
He also noted that Grayscale has more than "millions of investor accounts" and that investors around the world count on the company to "do what's right for them."
Sonnenshein "can't imagine" why the SEC wouldn't want to "protect investors" and "return value" to them. He added that Grayscale would not "shide away" from the fact that it had a "commercial interest" in the approval, noting that Grayscale could appeal to the U.S. if its application to challenge the SEC is denied. Supreme Court.
The SEC previously filed a 73-page brief with the U.S. Court of Appeals for the District of Columbia in December 2022, outlining its rejection of Grayscale’s June 2022 conversion of its $12 billion Bitcoin trust into a spot Bitcoin ETF. the reason for the request.
The SEC's decision is based on findings that Grayscale's proposals failed to adequately protect against fraud and manipulation. The agency made similar findings in several earlier applications to create spot-based bitcoin ETFs.
