Alameda Research Sues Grayscale Investments Seeking to Unlock Billions in Value for Shareholders

March 7, 2023 Bitcoin.com

Grayscale CEO Michael Sonnenshein Updates Crypto Market Outlook, Names One Thing He’s Excited About

March 2, 2023 The Daily Hodl

GBTC approval could return a ‘couple billion dollars’ to investors: Grayscale CEO

February 26, 2023 Coin Telegraph

Grayscale Investments' boss, Michael Sonnenshein, said that if GBTC got the green light to "convert" to a spot Bitcoin ETF there would "no longer" be a discount or a premium, amid ongoing legal action against the SEC.

Grayscale Investments' CEO Michael Sonnenshein stated 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, 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 the administrative procedures act” by denying Grayscale Bitcoin Trust (GBTC) to be an approved spot Bitcoin (BTC) exchange-traded fund (ETF), in June 2022.

He explained that this act ensures the regulator doesn’t show “favoritism,” or act “arbitrary,” adding that by approving Bitcoin Futures ETF, whilst rejecting “GBTC's conversion,” the SEC has acted “arbitrarily.”

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

He stated that there is actually a “couple billion dollars” of capital that would immediately go right back into investors pockets, on an overnight basis, as the fund would "bleed back" up to its net asset value, upon being approved as a spot Bitcoin ETF.

Sonnenshein explained that this is due to GBTC currently trading at a discount to its net-asset-value (NAV), but if it were to convert to an ETF, there would “no longer” be a discount or a premium, there’d be an “arbitraged mechanism” embedded.

He reiterated that Grayscale is in the process of “suing the SEC now,” and could have a decision challenging the SEC denial of its initial application, by as late as “fall 2023.”

He also noted that Grayscale has over a “million investor accounts," with investors all over the world counting on the firm 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 isn't going “to shy” away from the fact that it has a “commercial interest” in this approval, with Sonnenshein noting if the application to challenge the SEC gets denied, Grayscale might be able to appeal the case at the U.S. Supreme Court.

This comes after the SEC filed a 73-page brief with the U.S. Court of Appeals for the District of Columbia Circuit in Dec. 2022 outlining its reasons for denying Grayscale’s request to convert its $12-billion Bitcoin Trust into a spot-based Bitcoin ETF, in June 2022.

The SEC based its decision on findings that Grayscale’s proposal did not sufficiently protect against fraud and manipulation.

The agency had made similar findings in a number of earlier applications to create spot based Bitcoin ETFs.

Digital Currency Group Suspends Dividends Amid Regulatory Trouble With Subsidiary Genesis

January 18, 2023 Bitcoin.com

SEC looks to intercept Grayscale Bitcoin ETF review bid

December 13, 2022 Coin Telegraph

Bitcoin ETF. Bitcoin.

The SEC is looking to block an appeal from Grayscale Investments after denying its proposed Bitcoin exchange traded fund.

The United States Securities and Exchange Commission (SEC) is taking further steps to stop Grayscale Investments’ efforts to launch a Bitcoin exchange-traded fund (ETF). Grayscale began its legal challenge of the SEC’s denial order of the proposed investment product in June 2022.

A 73-page brief filed with the U.S. Court of Appeals for the District of Columbia Circuit on Dec. 9 saw the SEC lay out the reasoning for its initial decision to bar Grayscale’s request to convert its existing Bitcoin Trust into a spot Bitcoin ETF.

The SEC is looking for the D.C. Circuit to deny Grayscale’s appeal, which claims the proposed fund is inherently different from futures ETFs it has approved in the past.

Grayscale argues that the SEC's disapproval order violated the Administrative Procedure Act, the guidelines through which American federal agencies develop and issue regulations. The investment fund cited previous approvals by the SEC to list and trade Bitcoin futures contracts.

The SEC had contested this point, noting that previously approved products only contained futures contracts that trade on the Chicago Mercantile Exchange (CME). The exchange is a registrar of the Commodity Futures Trading Commission (CFTC) and operates under ‘robust surveillance’ according to the SEC.

The regulatory body believes the Bitcoin spot market is fragmented and unregulated in comparison to other investment vehicles. It also argues that Grayscale failed to provide a supportive argument that the CME’s surveillance of futures trading would ‘sufficiently detect and deter fraud and manipulation targeting the bitcoin spot market.’

Meanwhile, Grayscale maintains the SEC has failed to justify its different treatment of Bitcoin futures and spot Bitcoin exchange-traded products. The fund argues these products track BTC’s price more directly and has labeled the regulator's denial order as discriminatory and harmful to investors.

The Grayscale Bitcoin Trust has been operating since 2013 and offers accredited investors shares in the fund. The fund invests in BTC, giving investors exposure to the cryptocurrency in the form of a security, without having to directly acquire, manage and store BTC.

Grayscale has been looking to convert the fund into an ETF since 2016. It reiterated its reasoning behind the move in the launch of its legal tussle with the SEC, saying the ETF would give wider access to BTC and enhance investor protection.

Grayscale Investments