Like Valkyrie, Osprey has called on Grayscale to give up sponsor status and make himself a replacement. In one open letterOsprey CEO Greg King promised a 75% cut in management fees, immediately sought to implement an acquisition program and cooperate with regulators rather than pursue litigation.
The Pines and Falcons lawsuits were described by Jennifer Rosenthal, Grayscale’s vice president of communications, as “baseless” and “frivolous,” respectively. “We remain steadfast in our belief that converting GBTC to an ETF is the best long-term product structure for investors and are 100% committed to that effort,” she said.
As it stands, the various parties are at an impasse; Grayscale says it’s getting nowhere and remains confident in the strength of its lawsuit against the SEC, while activists are scratching their heads looking to get the company out.
In the meantime, the situation risks turning into a mud-sledding competition, Parish said, as Grayscale tries to get through this difficult period.
The conversion to an ETF, he said, is not necessarily going to be in Grayscale’s favor because of recent negative press coverage of DCG and its subsidiaries (the lending unit of a subsidiary, Genesis, filed for bankruptcy in January) will likely cause investors to flee as soon as possible, bringing with them millions of dollars in management fees.
“Grayscale’s whole strategy here is to limit acquisition and then PR, PR, PR. And to fight legal battles in whatever field they have to fight,” Parish declared.
Sonnenshein countered the idea that triggering the exchange would trigger an exodus of customers, arguing that a “war-tested, controlled” ETF structure would attract an even audience even bigger and an even bigger amount of capital into bitcoin. He also said that converting the trust into an ETF was planned from the start. “This is what investors want and deserve,” he said.
If the courts rule against Grayscale and the company exhausts all remaining avenues of legal appeal, Sonnenshein says it will Pursuing a tender offer whereby a portion of shareholders is entitled to redeem their shares at a price set taking into account “investor fairness”.
But RedeemGBTC and Fir Tree do not share Grayscale’s belief in the strength of the lawsuit against the SEC, which the pair described as “negative” and “wasted,” and pointed to the need for a settlement. emergency measures for the situation.
“If we think Grayscale will succeed [in converting GBTC to an ETF], we will not try to prevent it. We just didn’t think it was going to happen—so something had to be done,” Bailey said.
Three other shareholders said they believe the ETF is unlikely to be approved while Gary Gensler, the chairman of the SEC, remains at the helm. (Gensler’s term ends in 2026.) The SEC declined to comment.
“Surname [Grayscale] McClurg said. “Financial services is a confidence game; When your customers lose trust, you will never get them back. In the long run, I think they’re done.”
