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Jan 25 (Reuters) – Crypto asset manager Grayscale Investments is gearing up for a lengthy legal battle with the U.S. Securities and Exchange Commission over the creation of a Bitcoin exchange-traded fund (ETF). said the company’s CEO.
As the company awaits a court ruling on its June lawsuit against the SEC, CEO Michael Sonnenshein said it is prepared to appeal if the court upholds the SEC’s decision to reject the Bitcoin ETF proposal. rice field.
“The only option left for us by the SEC was to look back and say this is not right,” Sonnenshein said. Something I didn’t do and our team didn’t take it lightly,” he said.
In June, the SEC rejected Grayscale’s application to convert its flagship Grayscale Bitcoin Trust (GBTC.PK) (GBTC) into an ETF, a proposal that would prevent fraud and protect investors. claimed that it did not meet standards designed to protect
Grayscale sued the SEC shortly after the proposal was rejected, acting arbitrarily by denying its application for a spot bitcoin ETF, even though the regulator had previously approved a bitcoin futures ETF. claimed.
This case is being heard in the Court of Appeals for the District of Columbia. If either party appeals the judgment, the case will be sent to the U.S. Supreme Court or Enclave for panel review. Oral arguments in the case are scheduled for March 7, and Grayscale expects a final judgment on the case in the fall, Sonnenshein said.
The SEC did not immediately respond to a request for comment.
According to Grayscale’s website, Grayscale Bitcoin Trust manages $14.5 billion in assets. GBTC’s discount to Bitcoin is hovering around 41%, under pressure after crypto exchange FTX collapsed and crypto lender Genesis suspended withdrawals.
There are also concerns about infection. Both Genesis and Grayscale are owned by venture capital firm Digital Currency Group (DCG), and questions about whether DCG’s holdings of his GBTC should be sold also weigh on the discount.
Genesis’ cryptocurrency lending division filed for bankruptcy on January 19.
Grayscale had no business reliance on DCG or Genesis and was not affected by the bankruptcy, Sonnenshein said. Still, Genesis owned about 5% of his GBTC’s total outstanding shares, according to people familiar with the matter. Genesis did not immediately respond to a request for comment.
“Grayscale is an independent organization with its own leadership, governance, budget, policies and procedures, and the assets that underpin the Grayscale product family belong to their respective shareholders,” Sonnenshein said.
In a December letter, Sonnenshein told investors that Grayscale would consider the option of returning some of GBTC’s capital to shareholders if its legal challenge to the SEC fails.
Reported by Hannah Lang of Washington. Edited by Lananh Nguyen and Stephen Coates
Our standards: Thomson Reuters Trust Principles.
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