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Grayscale’s CEO highlights the option to buy back GBTC shares at 20% if the ETF conversion fails

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According to the year-end letter to investors published On December 10, Michael Sonnenstein, CEO of Grayscale Investments, said that the company may consider “a tender offer for a portion of outstanding shares in GBTC.” [Grayscale Bitcoin Trust]“If the latter’s ETF transaction is ultimately unsuccessful.” Sonnenshein stated that “this tender offer will hold no more than 20% of outstanding shares in GBTC” and will require an SEC regulatory “exemption” to approve the commission as well as shareholder approval. on this offer.

Grayscale and its over-the-counter exchange-traded fund GBTC are currently embroiled in a lawsuit with the SEC after the latter Grayscale application refused to convert GBTC into a Bitcoin ETF on June 29, 2022. As told by Sonnenshein, Grayscale filed its opening brief against the SEC on October 11, 2022, and is scheduled to file its response to the SEC’s response brief by January 13, 2022, with the final written brief filed on February 3, 2022. “Shortly thereafter, a panel of three judges will be selected to hear oral arguments and rule on the case,” Sonnenshein wrote to investors.

“In the event that we are unsuccessful in pursuing options to return a portion of the capital to shareholders, we do not currently intend to dissolve GBTC, but instead will continue to operate GBTC without an ongoing redemption program until we successfully convert it into a spot Bitcoin ETF.”

Cointelegraph previously reported that GBTC, along with other major grayscale cryptocurrency funds, are trading at discounts to their net asset values, or NAVs, from 34% to 69% Due to solvency concerns arising from the parent company, Digital Currency Group, and exposure To cryptocurrency broker Genesis Global. At press time, GBTC has $10.68 billion in Bitcoin (BTC) under management but is only worth $5.48 billion per market cap.