Grayscale Investments boss Michael Sonnenshein said there would be “no longer” a discount or premium if GBTC gets the green light to “convert” into a spot Bitcoin ETF amid his ongoing legal action against the SEC.

Grayscale Investments CEO Michael Sonnenshein said in a recent podcast interview that he “can’t imagine” why the U.S. Securities and Exchange Commission (SEC) “wouldn’t want” to protect Grayscale investors and return real asset value to them.

On Feb. 25, Sonnenshein explained in an interview with the popular podcast “What Bitcoin Did,” hosted by Peter McCormack, that the SEC “violated the Administrative Procedure Act” by refusing to designate the Grayscale Bitcoin Trust (GBTC) as an approved spot Bitcoin.

Bitcoin

Exchange Traded Funds (ETFs), June 2022.

He explained that the bill ensures that regulators do not show “partiality” or “arbitrary” behavior, adding that by approving a Bitcoin futures ETF while rejecting “the conversion of GBTC,” the SEC took “arbitrary” action.

Sonnenshein noted that when the SEC began approving the first Bitcoin ETFs, Grayscale “saw it as a sign” that the SEC was “changing their tune” on Bitcoin.

He said there were literally “billions of dollars” that would instantly return to investors’ pockets overnight as the fund “flowed back” to its net asset value after being approved as a spot bitcoin exchange-traded fund.

Sonnenshein explained that this is due to the fact that GBTC currently trades at a discount to its net asset value (NAV), but if it were converted into an ETF, there would be “no longer” a discount or premium, embedding an “arbitrage mechanism.”

He reiterated that Grayscale is “suing the SEC now” and could challenge the SEC’s rejection of its initial application by “fall 2023.”

He also noted that Grayscale has over “millions of investor accounts” and that investors around the world count on the company to “do the right thing for them.”

Sonnenshein “can’t imagine” why the SEC wouldn’t want to “protect investors” and “return” value to them.

Notably, Grayscale will not “circumvent” the fact that it has a “commercial interest” in this approval, and Sonnenshein noted that if the application to challenge the SEC is denied, Grayscale will likely appeal the case in the U.S. Supreme Court.

Related: SEC’s ‘one-dimensional’ approach is slowing down Bitcoin: Grayscale CEO

Previously, the SEC filed a 73-page brief with the U.S. Court of Appeals for the District of Columbia Circuit in December 2022, outlining its reasons for denying Grayscale’s request to convert its $12 billion Bitcoin Trust into a spot-based Bitcoin ETF in June 2022.

The SEC based its decision on a finding that Grayscale’s proposal failed to adequately protect against fraud and manipulation.

The agency made similar findings in many of the early applications to create spot-based Bitcoin ETFs.