Michael Sonnenshein, CEO of Grayscale Investments, stated in a recent podcast interview that he “can’t imagine” why the United States Securities and Exchange Commission (SEC) “wouldn’t want” to protect Grayscale investors and give them the real deal return asset.
In an interview with What Bitcoin Did, a popular podcast hosted by Peter McCormack, on Feb. 25, Sonnenshein stated that the SEC “violated the Administrative Procedures Act” by denying Grayscale Bitcoin Trust (GBTC), an authorized entity being spot bitcoin (BTC). Exchange Traded Fund (ETF), June 2022.
He explained that this law ensures that the regulator does not show “favorability” or act “arbitrarily,” adding that by approving the Bitcoin Futures ETF while denying the “conversion of GBTC,” the SEC was “arbitrarily” acted.
Sonnenshein noted that when the SEC began approving the first Bitcoin ETFs, Grayscale took it “as a sign” that the SEC was “changing its stance on Bitcoin.”
He explained that there is actually “a few billion dollars” of capital that would immediately flow back into investors’ pockets overnight as the fund would “bleed back” to its net asset value if approved as a spot Bitcoin ETF .
Sonnenshein explained that this is because GBTC is currently trading at a discount to its net asset value (NAV), but if it were converted into an ETF there would be “no longer a discount or premium”, instead there would be an “arbitrated mechanism”. be embedded.
He reiterated that Grayscale is in the process of “suing the SEC now” and could make a decision by “fall of 2023” challenging the SEC’s denial of the initial filing.
He also noted that Grayscale has over a “million investor accounts,” with investors around the world counting on the company “to do what’s right for them.”
Sonnenshein “can’t see” why the SEC doesn’t want to “protect investors” and “give them that value back.”
It noted that Grayscale will not “shy away” from the fact that it has a “commercial interest” in the approval, with Sonnenshein noting that Grayscale may have an appeal if the SEC’s challenge motion is denied in the US Supreme Court .
Related: SEC’s ‘One Dimensional’ Approach Slows Bitcoin’s Progress: Grayscale CEO
This comes after the SEC filed a 73-page brief in December 2022 with the U.S. Court of Appeals for the District of Columbia Circuit setting out its reasons for denying Grayscale’s motion to list its $12 billion Bitcoin Convert Trust into a Spot-based Bitcoin ETF. in June 2022.
The SEC based its decision on findings that Grayscale’s proposal did not provide adequate protection against fraud and tampering.
The agency had made similar findings in a number of previous applications to create spot-based Bitcoin ETFs.
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