According to the CEO of Grayscale Investments, the Securities and Exchange Commission’s (SEC) approach to crypto regulatory compliance has halted the growth of Bitcoin in the nation.
In a letter published on January 23 in The Wall Street Journal, Michael Sonnenshein, the head of the digital asset management company, said that the SEC was “late to the game” when it came to regulating cryptocurrencies and stopping FTX from going bankrupt. Sonnenshein continued:
“Late’ doesn’t capture what transpired here. The problem is the Securities and Exchange Commission’s one-dimensional approach of regulation by enforcement.”
Grayscale is suing the SEC right now because it was denied permission to convert its Bitcoin trust into a spot-based exchange-traded fund (ETF).
Sonnenshein says that the regulator’s lack of action “stopped Bitcoin from expanding inside the U.S. regulatory perimeter” and into the crypto business.
As a result, American investors have been compelled to use overseas cryptocurrency enterprises “with less protection and regulation,” he claimed.
Sonnenshein’s opinion piece comes at the same time that Grayscale is suing the SEC for “arbitrarily denying” Grayscale’s plans to turn its Grayscale Bitcoin Trust (GBTC) into a spot ETF.
The SEC said Grayscale’s plan didn’t do enough to prevent fraud and manipulation. Grayscale replied that the SEC was unfairly handling spot-traded products slightly different from futures-traded products.
