Grayscale CEO: If GBTC is approved, investors could receive a “couple billion dollars.”

In a recent podcast interview, Grayscale Investments CEO Michael Sonnenshein stated that 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.

Sonnenshein stated on Feb. 25 in an interview with What Bitcoin Did, a popular podcast hosted by Peter McCormack, that the SEC “violated the administrative procedures act” by denying Grayscale Bitcoin Trust (GBTC) approval as an approved spot Bitcoin (BTC) exchange-traded fund (ETF) in June 2022.

He explained that this act ensures the regulator does not show “favoritism” or act “arbitrarily,” adding that the SEC acted “arbitrarily” by approving Bitcoin Futures ETF but not approving “GBTC’s conversion.”

Sonnenshein pointed out that when the SEC began approving the first Bitcoin ETFs, Grayscale saw it as “a sign” that the SEC was “actually changing their attitude toward Bitcoin.”

He stated that there is a “couple billion dollars” of capital that would immediately go right back into investors’ pockets as the fund bleeds back up to its net asset value.

Sonnenshein explained that this is due to the fact that GBTC is currently trading at a discount to its net asset value (NAV), but if it were converted to an ETF, there would “no longer” be a discount or a premium, but instead a “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, by as late as “fall 2023.”

He also stated that Grayscale has over a “million investor accounts,” with investors from all over the world relying on the company to “do the right thing for them,” and that he “can’t imagine” why the SEC wouldn’t want to “protect investors” and “return that value” to them.

Sonnenshein also stated that he will not “shy away” from the fact that Grayscale has a “commercial interest” in this, stating that if the application to challenge the SEC is denied, Grayscale may be able to appeal the case to the United States Supreme Court.

This comes after the SEC denied Grayscale’s application in December 2022 to convert its $12 billion Grayscale Bitcoin Trust (GBTC) into a spot-based Bitcoin ETF, citing findings that Grayscale’s proposal did not adequately protect against fraud and manipulation.

Similar findings had been made by the agency in a number of previous applications to create spot-based BTC ETFs.