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Grayscale Vs SEC – Crypto Community Reacts Mixed

 


After influential crypto asset manager Grayscale failed in its attempt to convert its market-leading bitcoin mutual fund - the Grayscale Bitcoin Trust (GBTC) - into a bitcoin index fund (ETF), the investment firm has meanwhile taken legal action against the US Securities and Exchange Commission 's decision SEC initiated. The reactions of the crypto community to these developments have been very mixed, ranging from allegations of price manipulation by the SEC to alternative proposals.


For example , Reddit user u/ ThatsMRcurmudgeon2u , who claims to be a securities law attorney, believes that such a legal dispute was to be expected sooner or later, because SEC boss Gary Gensler is now taking a hard line, which also stipulates, among other things, that register all crypto exchanges with the stock exchange supervisory authority and thus place them under their responsibility. To that end, the alleged Reddit user accuses the SEC of “taking GBTC hostage”.


Jake Chervinsky, a renowned crypto industry attorney, also described the refusal of the requested conversion as "deeply disappointing" because it would violate both applicable law and common sense. Chervinsky sees the SEC's top priority as protecting investors, which would be much easier to do with an ETF.


Twitter user Ann, meanwhile, gets far more critical, noting that the SEC recently cleared an ETF for shorting Bitcoin. Accordingly , she concludes that the stock exchange supervisory authority wants to “keep the Bitcoin price low in a targeted manner”.


Bitcoin advocate Vijay Boyapati, on the other hand, proposes a constructive alternative by advising “winding up the mutual fund.” Rather, the Bitcoin contained in it should be paid back to investors so that Grayscale can set up a completely new ETF afterwards. Especially against the background that the investment company demands 2% management fees for its fund - which are not incurred with an index fund - Grayscale should now rather "do the right thing" and be fair to investors.



The Reddit user u/Percyheckendorf brings another perspective to the discussion, because the rejection of the ETF would be bad news, especially for bond funds, because they would now inevitably have to buy more stocks, which the user believes have significantly less long-term potential as Bitcoin.


In a circular to its own investors, Grayscale revealed on Monday that the SEC had received more than 11,400 responses to the proposed Bitcoin ETF, with 99% supporting the proposed index fund. Nevertheless, the authority decided to reject it.

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