Greyscale set to return investor Capital in view of SEC ruling

Greyscale set to return investor Capital in view of SEC ruling 

Greyscale Investments, an American digital currency asset management company, is exploring its options to return some of the capital held in the flagship Greyscale Bitcoin (GBTC) Product if the Securities and Exchange Commission (SEC) refuses to say yes to its pot bitcoin exchange-traded fund (ETF). This is according to reports on Monday, 19th December. 

An option open to them, according to reports, is to offer a tender of at least 20% of outstanding GBTC shares which are currently being traded at a 49% discount to net asset value (NAV). A tender offer would be a direct appeal made to shareholders to sell their shares at a given price during a given time. 

The investment firm has been refused more than once by the SEC, as it has tried to convert its Bitcoin trust to an ETF severally. The SEC  sighted a lack of regulatory oversight in a brief earlier this month. 

The investment firm has said that conversion to ETF would help raise its share price to trade level with its underlying value. After the conversion, the Market participants would be able to create and redeem shares of GBTC to ensure that they reflect the underlying value of the bitcoins it holds. 

According to reports, the Letter by  Chief Executive Michael Sonnenshein is an attempt to calm the shareholders’ minds, following a challenging month in the Crypto space after the collapse of FTX. 

In June, Grayscale sued the SEC hours after the regulator rejected its ETF application, with the company saying that it “vehemently disagreed” with the SEC’s decision.

While Digital Currency Group, owners of Greyscale, Genesis, and other affiliated entities own about 10% of the outstanding shares, they are only allowed to sell 1% of the total shares outstanding, to the public market every three months under Rule 144 of the Securities Exchange Act of 1933.

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