Grayscale CEO hails court decision as ‘huge win’ for crypto

Crypto advocates celebrated the court’s decision as a rare bright spot amid the persisting bear market

After Grayscale’s landmark court victory over the Securities and Exchange Commission, CEO Michael Sonnenshein took a victory lap.

Huge win for Grayscale, huge win for our investors—and really the crypto and investment community as a whole, Sonnenshein said Wednesday morning in a TV interview with Bloomberg News.

On Tuesday, the U.S. Court of Appeals for the D.C. Circuit Bitcoin found that the Securities and Exchange Commission could not reasonably explain why it rejected Grayscale’s request to convert its Grayscale Bitcoin Trust digital asset investment product into a spot Bitcoin exchange-traded fund after already approving Bitcoin futures products.

Crypto supporters celebrated the court’s decision as a rare bright spot amid the persisting bear market. News of the ruling fuelled a 6 per cent rise in Bitcoin’s price, the world’s biggest crypto currency, on Tuesday. It was trading at nearly $27,000 on Wednesday afternoon.

Sonnenshein said in the interview that the court’s decision vacated the SEC’s rejection of its GBTC application to create a spot Bitcoin ETF. He noted that the Securities and Exchange Commission has 45 days to request a rehearing, but after that period there will be a final mandate from the court.

In spite of increased competition from BlackRock and Fidelity over spot Bitcoin ETFs, Sonnenshein said he did not see a requirement for a surveillance-sharing agreement when it comes to GBTC—a view considered by peers—although a court eventually could need one.

The court agreed with us, Sonnenshein added, “that the arguments we have been putting forward all along throughout this process are such that the Securities and Exchange Commission already has the tools it needs to approve spot Bitcoin products such as GBTC.”

Sonnenshein added that Grayscale will reduce fees for GBTC once it is converted to an exchange-traded fund, which he said the firm is working with the Securities and Exchange Commission to achieve “expeditiously.” GBTC charges a fee of 2 per cent, much higher than the average fee of 0.54 per cent across other exchange-traded funds, as per Bloomberg Intelligence.

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