direct attention to the DCG, grayscale; Congressman condemns GBTC charges and ties
- DCG and Grayscale have drawn political attention in a satirical way, according to analyst Andrew’s tweet.
- Congressman Sherman condemned GBTC’s high fees and its ties to DCG in a scathing letter to the SEC.
- Sherman raised concerns about Grayscale’s lack of independent directors and rising BTC-based fees.
X3 founder Andrew spoke about the Digital Currency Group (DCG) and Grayscale’s emergence on the political scene in his tweet earlier today. In a recent update, Andrew shared that DCG and Grayscale have entered the “political radar in a new and somewhat ironic way.”
Update: DCG and Grayscale are now on the political radar in a new and somewhat ironic way. @BradSherman (and his office) sent a scathing letter to @SECGov and Gary Gensler knocking GBTC $, it’s an obscenity fee and an incestuous relationship with DCG. pic.twitter.com/xOpnJlhS1q
— Andrew (@AP_Abacus) May 12, 2023
Alongside this, Andrew attached a “scathing letter” written by US Representative Brad Sherman and his office to US Securities and Exchange Commission (SEC) and Chairman Gary Gensler, condemning GBTC for its exorbitant fees and questionable ties to DCG.
In the letter dated May 11, the congressman emphasized that Grayscale has demonstrated a profit-driven approach, regardless of the negative impact on the large number of retail investors, over 850,000, who currently find themselves with restricted access to their assets within GBTC.
According to Sherman’s statement, the issuance of additional GBTC shares by Grayscale had a significant impact on the shares trading at a discount of more than 40% compared to their net asset value. Moreover, according to data from ycharts, the discount is currently down to 39.76% at the time of this press release.
Sherman affirmed that such measures raised the concerns of many GBTC investors, stressing the need for the Saudi Electricity Company to intervene to protect the interests of investors.
Meanwhile, Grayscale, citing Regulation M, denied investor requests for refunds. The company pointed out that the rule prohibits the simultaneous sale and redemption of the same security.
Sherman raised a series of inquiries with the Securities and Exchange Commission regarding Regulation M and its potential impact on shareholder recovery. Additionally, he questioned Grayscale’s lack of an independent director on its board and expressed concerns about the high 2% fee based on.
The congressman urged the FSA to provide responses to these inquiries by May 15, and asked for clarifications on these matters.
After DCG, Grayscale drew attention; Congressman Condemns GBTC Charges Relationship appeared first in Coin Issue.