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Grayscale Meets SEC Again, CEO Says Commission Should Approve All at Once

2 mins
Updated by Kyle Baird
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In Brief

  • Grayscale CEO, Michael Sonnenshein, urges SEC to approve all Bitcoin ETFs simultaneously to avoid any first-mover advantage.
  • Sonnenshein warns that GBTC investors could be disadvantaged if the SEC doesn't allow GBTC to convert to a spot ETF simultaneously with others.
  • Grayscale is prepared to list GBTC with a reduced ETF fee once trading commences, a move from the current 2% fee.
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Crypto asset manager Grayscale has had another meeting with the US Securities and Exchange Commission as final ETF details get ironed out. Meanwhile, the company’s chief executive said that its clients would lose out if it can’t convert the Grayscale Bitcoin Trust (GBTC) to a spot ETF.

On December 20, Grayscale chief executive Michael Sonnenshein told Bloomberg that GBTC investors of the Grayscale Bitcoin Trust would be hugely disadvantaged if the SEC doesn’t allow it to convert the fund to a spot ETF at the same time as others are approved. 

Grayscale’s Concerns Rising

“I think that the SEC should and does, in fact, want to create an even playing field,” he said. 

At least twelve companies are vying for a spot Bitcoin ETF approval, including giants BlackRock and Fidelity. Meanwhile, Grayscale is trying to get its existing GBTC trust converted to a spot fund. 

Sonnenshein said it should all happen simultaneously to prevent one company from gaining the first-mover advantage: 

“We’ve publicly been advocates of the fact that when the commission is ready to give the requisite approvals for spot products to come to market, that it should be done all at once — the issuers who are operationally ready to launch their products should come out the gate all at once.”

Grayscale is ready to list GBTC with a lowered ETF fee once it starts trading, he said. The Trust currently has a 2% fee, which is higher than that of general ETFs. 

Read more: How To Prepare for a Bitcoin ETF: A Step-by-Step Approach

Sonnenshein said that if the SEC didn’t allow them to convert,

“It would put them in a terrible spot if they were to disadvantage the hundreds of thousands of investors in GBTC thinking about other products coming to market before it.”

Furthermore, a key issue is whether the ETFs will use in-kind or cash redemptions. In-kind is seen as preferable by Grayscale to protect investors. However, the SEC is angling for cash redemptions to avoid broker-dealers handling bitcoin.

ETF Latest News

Earlier this week, BlackRock “bent the knee,” amending its filing to cash creates in line with SEC requirements. 

Grayscale met with the SEC again this week to iron out final details about its listing, according to ETF analyst James Seyffart. 

Meanwhile, ETF issuers Bitwise and Hashdex have already started their marketing campaigns. 

On December 21, Bitwise released its second Bitcoin commercial, bringing the total to three crypto ads in just a couple of days. 

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Martin Young
Martin Young is a seasoned cryptocurrency journalist and editor with over 7 years of experience covering the latest news and trends in the digital asset space. He is passionate about making complex blockchain, fintech, and macroeconomics concepts understandable for mainstream audiences.   Martin has been featured in top finance, technology, and crypto publications including BeInCrypto, CoinTelegraph, NewsBTC, FX Empire, and Asia Times. His articles provide an in-depth analysis of...