Grayscale Investments is seeking alternatives for its commitment of converting Grayscacle Bitcoin Trust (GBTC) into an exchange-traded fund (ETF), the Wall Street Journal has learned, citing a letter to investors from Grayscale CEO Michael Sonnenshein.
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Currently, Grayscale is in a legal battle against the US Securities and Exchange Commission (SEC) as the financial regulator rejects bitcoin-ETF applications, claiming that these products are vulnerable to fraud and market manipulation.
One of Grayscale's options includes a tender offer for up to 20% of the outstanding shares of GBTC. So far, Grayscale have only been creating shares, but not redeeming them. With a tender offer, shareholders could sell their shares at a specific price during a certain time, Sonnenshein said in the letter. However, the timeframe and other details of this offer remain unclear.
In early December, New York-based hedge fund Fir Tree Capital Management filed a lawsuit against Grayscale Investments, asking the court to oblige the firm to buyback shares of Grayscale Bitcoin Trust (GBTC), which are now trading at a 45% discount.
Fir Tree also wants Grayscale to abandon a legal battle with the US Securities and Exchange Commission (SEC) as the financial regulator earlier refused to permit the conversion of GBTC into a bitcoin-ETF.
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