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

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

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 said there is a “couple billion dollars” of capital that would immediately go back into investors’ pockets, on an “overnight basis,” if GBTC was approved as a spot Bitcoin ETF, as the fund would “bleed back” up to its net asset value (NAV).

Sonnenshein explained that this is due to GBTC currently trading at a discount to its NAV, but if it were to convert to an ETF, there would “no longer” be a discount or a premium; there would 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’s denial of its initial application by as early as “fall 2023.”

He also noted that Grayscale has over a “million investor accounts,” with investors worldwide 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.

He added that Grayscale isn’t going “to shy” away from the fact that it has a “commercial interest” in this approval, noting if the application to challenge the SEC gets denied, Grayscale might be able to appeal the case to 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 in December 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 several earlier applications to create spot-based Bitcoin ETFs.