Michael Sonnenshein, CEO of Grayscale Investments, stated in a recent interview that he “cannot imagine” why the US Securities and Exchange Commission (SEC) “would not want” to protect Grayscale investors and return true value to them. of the assets. . Sonnenshein made this statement in response to a question about why the SEC “would not want” to protect Grayscale investors.

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

He claimed that this law ensures that the regulator does not show “favoritism” or act “arbitrarily,” adding that the SEC acted “arbitrarily” in approving Bitcoin Futures ETFs while rejecting the “GBTC conversion.” He explained that this act ensures that the regulator does not show “favouritism” or act “arbitrarily.”

Grayscale Investments saw the SEC’s approval of the first Bitcoin exchange-traded funds (ETFs) as “an indication” that the SEC was “changing its approach to Bitcoin,” according to Sonnenshein’s observation.

He stated that there is a “couple of billions of dollars” of capital that would immediately return to investors’ pockets, “overnight”, if GBTC were approved as a spot Bitcoin ETF, and that this capital “I would bleed again.” to the net asset value of the fund. He said this would occur if the fund were 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 an ETF, there would “no longer” be a discount or premium; instead, there would be a “referee mechanism” built into the product.

He reaffirmed that Grayscale is now “sueing the SEC now” and that the company may have a ruling appealing the SEC’s rejection of its original application as soon as “fall 2023.”

In addition to this, he said that Grayscale has more than “one million investor accounts” and that investors around the world trust the company to “do what’s right for them.”

Sonnenshein “cannot imagine” a scenario where the SEC has no interest in “protecting investors” or “returning that value” to those investors.

He went on to say that Grayscale is not going to “shrink” from the fact that it has a “business interest” in this approval, noting that if the request to challenge the SEC is denied, Grayscale could appeal the case. to the Supreme Court of the United States. He said Grayscale will not “shrink” from the fact that it has a “commercial interest” in this approval.

This is because the Securities and Exchange Commission (SEC) filed a 73-page report with the United States Court of Appeals for the District of Columbia in December 2022, outlining its reasons for rejecting Grayscale’s request to convert its $12 billion Bitcoin Trust. into a spot-based Bitcoin ETF in June 2022. The report was filed in response to Grayscale’s request to convert its Bitcoin Trust to a spot-based Bitcoin ETF.

The conclusions that Grayscale’s approach did not adequately protect against fraud and manipulation were the primary considerations that led to the SEC’s determination.

The regulator came to the same conclusion in several previous requests for the creation of point-based Bitcoin ETFs.