Grayscale Considers Suing The SEC Over Bitcoin ETF: Report

Grayscale considers suing the SEC over the rejected Bitcoin ETF with the CEO Michael Sonneshein saying that all of the options are on the table, so let’s read more today in our Bitcoin news.

The SEC hasn’t approved a Bitcoin spot ETF and Grayscale is trying to change that. Crypto investment company Grayscale was working for the most part of the year to convert its Grayscale Bitcoin Trust which has over $28.5 billion in AUM into a Bitcoin-exchange traded fund. Standing in the way is the US SEC which has yet to approve any crypto spot ETF for US-based investors.

With the agency set to make a decision soon, the CEO Michael Sonnenshein said that Grayscale considers suing the SEC if the application is rejected. The Grayscale Bitcoin trust allows private investors to purchase shares in a pool of BTC so they can gain some price exposure to the asset without having to worry about custody. It can have certain tax benefits compared to direct investmetns in BTC but it also has some downsides like the six-month lockup period for accredited investors.

While GBTC is meant to trade close to the price of BTC, it is now trading at a 26% discount which means it is much cheaper to buy than actual BTC which is good for those that are looking to get in but not so much for those that have their shares locked up. The exchange-traded funds differ and they are financial instruments that are tied to another asset or basket of assets. Because they trade like company stocks, the price of BTC ETF should trade close to the actual BTC.

A Bitcoin ETF is the holy grail for crypto investment companies and comes with low fees for investors that can easily integrate into retirement portfolios and will allow everyday users some more price exposure to BTC without concerning themselves with custody. The SEC denied a lot of ETF applicants and some of them included Bitwise, VanEck, and Winklevoss. The SEC’s reason for allowing BTC futures ETFS while denying the Bitcoin spot ETF is related to the fact that its sister agency, the CFTC also has regulatory oversight over the derivatives exchanges but neither agency has a lot in regards to the regulatory power over the trading of BTC.

While Sonnenshein called the adoption of BTC futures ETFs quite exciting, he said people are looking for more options and there are up to 800,000 accounts in the US that await to get converted into an ETF.