Grayscale Threatens US CVM To Sue If They Refuse Its Bitcoin ETF

Charlie Taylor

Michael Sonnenshein, CEO of Grayscale

Although Brazil already has its Bitcoin ETF, the SEC (US CVM) has continued to refuse listings of BTC ETFs for years. Grayscale’s current priority is to transform its GBTC fund into an ETF and CEO Michael Sonnenshein does not rule out the possibility of judicial actions. Grayscale is considering legal action against the US Securities and Exchange Commission (SEC) if the agency continues to ban the launch of a spot bitcoin ETF, CEO Michael Sonnenshein said. Americans have already seen the approval of a Bitcoin ETF based on futures contracts, but also composed of government bonds. However, all attempts to list a spot ETF in the US, i.e. one that trades bitcoin on sight, have been rejected. “I think all options are on the table,” Sonnenshein said during an interview with Bloomberg on Monday, when asked whether Grayscale would consider an Administrative Procedure Act lawsuit if its request to convert the Grayscale Bitcoin Trust (GBTC) into a ETF is denied. The world’s largest digital currency asset manager has filed to convert its main trust, which is lower than the currently banned spot bitcoin ETF structure, Sonnenshein said in April 2021. resources of our company in converting the GBTC, our main fund, into an ETF,” said Sonnenshein. “It is really important for investors to know that we have and will continue to defend them.” The SEC is currently seeking public comment on approving a bitcoin spot ETF. The regulator has given issuers, investors and other interested parties 240 days to make suggestions; the period ends in early July. Grayscale has been encouraging investors to submit feedback, even creating an education page and email form on its website. “This is a very, very important part of the process,” Sonnenshein said.

“GBTC is now owned by investors in all 50 states, and there are currently over 800,000 accounts in the US, all waiting patiently to convert it into an ETF.”

The SEC cited concern about market manipulation as the main obstacle to approving a spot product. “When reviewing ETPs [Exchange-traded products ou produto negociado em bolsa] spot bitcoin, the commission must apply all standards of the Exchange Act, which it followed in connection with its orders, considering previous proposals to list bitcoin spot ETPs,” SEC Chairman Gary Gensler wrote in a recent letter. “In particular, the commission should consider whether the bitcoin spot ETP proposal is designed to prevent fraudulent and manipulative acts and practices.” Despite the lengthy regulatory process, Sonnenshein insisted that the Grayscale team remains confident that the conversion to an ETF will happen eventually.

“Ultimately, we believe it is a matter of when it is not a matter of whether a spot Bitcoin ETF is approved,” he said.

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