Grayscale CEO Michael Sonnhenshein spoke to CNBC’s Squawk Box on Wednesday on his company’s latest victory in its lawsuit against the Securities and Exchange Commission (SEC).
While discussing next steps and the possibility of appeal, Sonnhenshein promised that Grayscale’s fees are prepared to drop should its Bitcoin trust successfully convert into an ETF.
What’s Next For Grayscale?
During the interview, Sonnhenshein explained that the SEC now has 45 days to request a “rehearing” of the case – an appeal for courts to reconsider a potential mistake from the previous ruling.
“We really have to be patient and follow the federal rules of appellate procedure here,” said Sonnhenshein. “Ultimately, the court will issue a final mandate that will detail the operational next steps.”
According to the Wall Street Journal, an SEC spokeswoman said the agency is “reviewing the court’s decision to determine next steps.”
In its ruling, the court determined that the SEC was being “arbitrary and capricious” by denying Grayscale’s conversion into a Bitcoin spot ETF while approving Bitcoin futures ETFs, and that its justifications for doing so were “unreasonable.”
Besides appealing to the Supreme Court, the agency could approve Grayscale’s application, deny it based on another reason, or withdraw its prior approvals of Bitcoin futures ETFs to remain consistent. After losing another major lawsuit to Ripple last month, the SEC chose to appeal the case.
Sonnhenshein claimed that continuing to deny Grayscale’s application would “directly violate the SEC’s mandate” by harming Grayscale’s current investors who expect the conversion to occur.
Lower Fees Incoming
While still unable to provide a specific timeline, Sonnhenshein remains confident that Grayscale’s spot ETF will be approved. When that happens, he says the fund will “certainly be lowering fees.”
Until now, GBTC has charged shareholders a 2% annual fee. Critics have often argued that this fee is “exorbitant” considering existing Bitcoin spot ETFs – like Canada’s Purpose Bitcoin ETF – charge a 1% management fee.
Sonnhenshein has previously attributed Grayscale’s high fees to legal costs.
The CEO dismissed concerns that the timing of Grayscale’s potential approval – during a year when excitement has largely left crypto as a whole – could impact its performance.
“The investment community has never been more certain that crypto as an asset class is here to stay,” he said.