Home Regulation US lawmaker questions SEC about GBTC redemptions

US lawmaker questions SEC about GBTC redemptions

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US Congressman Brad Sherman has asked the Securities and Exchange Commission (SEC) whether Grayscale Bitcoin Trust Investors (GBTC) can redeem assets from investment firms.

May 11th letter Rep. Addressed SEC Chairman Gary Gensler that Grayscale will prioritize profits regardless of how their assets affect the more than 850,000 retail investors currently trapped in GBTC. claimed to be.

“Grayscale advertised itself as a way for individual investors to invest in Bitcoin and share in its financial growth without worrying about the security and custody issues that come with owning the cryptocurrency directly. .”

Grayscale’s decision to issue more GBTC shares played a key role in trading at a discount of more than 40% to its net asset value, he said. According to ycharts, the discount rate he has shrunk to 39.76% at the time of this writing. data.

shaman I got it these actions caused thousands of G concernsBTC Investors added that the SEC’s intervention was necessary for investor protection.

Grayscale, on the other hand, had rejected investors’ requests to allow redemption, citing Regulation M. The rule prohibits companies from selling and redeeming the same security at the same time.

Sherman raised several questions with the SEC about Regulation M and whether it remains a barrier to shareholder redemption. His other questions were about the lack of independent directors on Grayscale’s board and whether the 2% Bitcoin-based fee is high.

He asked financial regulators to answer those questions by May 15.

Communities welcome intervention

Some described the letter as a welcome development, sparking mixed opinions from the cryptocurrency community. However, several others criticized Sherman, citing his previous anti-crypto stance, and saw the letter as another sign of FUD.

The lawmaker has previously described Bitcoin holders as tax evaders and has maintained a strong anti-crypto rhetoric in his interventions in this area.

The letter, meanwhile, poses another problem for Grayscale. The company is in a dispute with the SEC over its refusal to approve the conversion of the BTC Trust into a spot ETF.

On top of that, its parent company, Digital Currency Group, is in financial turmoil because of one of its subsidiaries, Genesis, which filed for bankruptcy on Jan. 19.

A US lawmaker’s questioning post to the SEC regarding GBTC redemption was first posted on CryptoSlate.

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