Grayscale Investments’ CEO Michael Sonnenshein stated he “can’t imagine” why the United States Securities and Exchange Commission (SEC) “wouldn’t want” to protect Grayscale investors and return the true asset value to them, in a recent podcast interview.

In an interview with What Bitcoin Did, a popular podcast hosted by Peter McCormack, on Feb. 25, Sonnenshein explained that the SEC “violated the administrative procedures act” by denying Grayscale Bitcoin Trust (GBTC) to be an approved spot Bitcoin (BTC) exchange-traded fund (ETF), in June 2022.

He explained that this act ensures the regulator doesn’t show “favoritism,” or act “arbitrary,” adding that by approving Bitcoin Futures ETF, whilst rejecting “GBTC’s conversion,” the SEC has acted “arbitrarily.”

Sonnenshein noted that when the SEC started approving the first Bitcoin ETFs, Grayscale took it “as a sign” that the SEC was “changing their attitude to Bitcoin.”

He stated that there is actually a “couple billion dollars” of capital that would immediately go right back into investors pockets, on an overnight basis, as the fund would “bleed back” up to its net asset value, upon being approved as a spot Bitcoin ETF.

Sonnenshein explained that this is due to GBTC currently trading at a discount to its net-asset-value (NAV), but if it were to convert to an ETF, there would “no longer” be a discount or a premium, there’d be an “arbitraged mechanism” embedded.

He reiterated that Grayscale is in the process of “suing the SEC now,” and could have a decision challenging the SEC denial of its initial application, by as late as “fall 2023.”

He also noted that Grayscale has over a “million investor accounts,” with investors all over the world counting on the firm to “do the right thing for them.” 

Sonnenshein “can’t imagine” why the SEC wouldn’t want to “protect investors” and “return that value” to them.

It was noted that Grayscale isn’t going “to shy” away from the fact that it has a “commercial interest” in this approval, with Sonnenshein noting  if the application to challenge the SEC gets denied, Grayscale might be able to appeal the case at the U.S. Supreme Court.

Related: SEC’s ‘one-dimensional’ approach is slowing Bitcoin progress: Grayscale CEO

This comes after the SEC filed a 73-page brief with the U.S. Court of Appeals for the District of Columbia Circuit in Dec. 2022 outlining its reasons for denying Grayscale’s request to convert its $12-billion Bitcoin Trust into a spot-based Bitcoin ETF, in June 2022. 

The SEC based its decision on findings that Grayscale’s proposal did not sufficiently protect against fraud and manipulation.

The agency had made similar findings in a number of earlier applications to create spot based Bitcoin ETFs.