Grayscale May Return 20% Of Investor Capital If SEC Rejects Spot Bitcoin ETF: Report

If the U.S. Securities and Exchange Commission (SEC) declines to approve its spot Bitcoin BTC/USD exchange-traded fund (ETF), Grayscale Investments is considering options to return some of the capital of its flagship Grayscale Bitcoin GBTC product.

According to the Wall Street Journal, citing a letter to investors, Grayscale is to offer a tender for 20% of the existing GBTC shares, which are now trading at a 49% discount to its net asset value (NAV).

Earlier this month, the SEC blamed a lack of regulatory monitoring as the reason Grayscale's attempt to convert its Bitcoin trust into an ETF was unsuccessful many times.

Also read: Will Binance Succumb To Crypto Market Fears?

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According to Grayscale managing director Michael Sonnenshein, the firm currently intends to continue operating GBTC without an ongoing redemption campaign until it is successful in turning it into a spot Bitcoin ETF if it is unable to restore capital to GBTC shareholders via a tender offer or ETF.

Grayscale filed a lawsuit against the SEC in June, claiming that it "vehemently disagreed" with the agency's decision to reject the company's ETF application.

Compared to its all-time high in November 2021, the price of Bitcoin and other major cryptocurrencies like Ethereum ETH/USD has fallen nearly 70%, wiping out billions of dollars of investors' wealth and bankrupting several large firms.

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