2 years ago
U.S. Congressman Brad Sherman questioned the Securities and Exchange Commission (SEC) astir whether Grayscale Bitcoin Trust investors (GBTC) tin redeem their assets from the concern company.
In a May 11 letter directed to the SEC Chair Gary Gensler, the Congressman claimed that Grayscale prioritized profits careless of however it affected implicit 850,000 retail investors whose assets are presently trapped successful GBTC.
“Grayscale marketed itself arsenic a mode for retail investors to put successful bitcoin and stock successful its fiscal maturation without worrying astir the information and retention difficulties that travel with owning cryptocurrencies directly.”
According to the Congressman, Grayscale’s determination to contented much GBTC shares played a important relation successful the shares trading astatine implicit 40% discount to its nett plus value. The discount has narrowed to 39.76% arsenic of property time, according to ycharts data.
Sherman noted that these actions created concerns for thousands of GBTC investors, adding that an SEC involution was indispensable for capitalist protection.
Meanwhile, Grayscale had denied investors’ petition for it to let redemptions, citing Regulation M. The regularisation prohibits companies from simultaneous income and redemption of the aforesaid security.
Sherman posed respective questions to the SEC astir Regulation M and whether it was inactive a obstruction to shareholder redemptions. His different questions bordered connected Grayscale’s deficiency of an autarkic manager connected its committee and whether its 2% Bitcoin-based interest was high.
The lawmaker requested that the fiscal regulator reply these questions earlier May 15.
Community welcomes intervention
The missive generated mixed opinions from the crypto community, with immoderate describing it arsenic a invited development. However, respective others criticized Sherman and considered the missive different motion of FUD — citing his erstwhile anti-crypto posture.
The lawmaker had antecedently described Bitcoin holders arsenic taxation evaders and has maintained a strong anti-crypto rhetoric successful his interventions astir the space.
Meanwhile, the missive presents different headache for Grayscale. The steadfast is battling the SEC implicit its refusal to o.k. the conversion of its BTC spot into a spot ETF.
Besides that, its genitor institution Digital Currency Group is successful a fiscal messiness owed to 1 of its subsidiaries — Genesis — which filed for bankruptcy connected Jan. 19.
The station US lawmaker questions SEC astir GBTC redemptions appeared archetypal connected CryptoSlate.
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