SEC regulation slows down the development of cryptocurrencies
2023.01.24 02:42
SEC regulation slows down the development of cryptocurrencies
By Tiffany Smith
Budrigannews.com – According to Grayscale Investments’ chief executive officer, the SEC’s approach to crypto regulatory enforcement has stymied the development of Bitcoin (BTC) in the nation.
Michael Sonnenshein, the head of the cryptocurrency asset management company, said in a letter that was published on January 23 in The Wall Street Journal that he agreed with the claim that the SEC was “late to the game” when it came to crypto regulation and preventing the bankruptcy of FTX. He added the following:
“What took place here is not captured by “Late.” The issue lies in the Securities and Exchange Commission’s narrow focus on enforcement as regulation.
Grayscale is suing the SEC for preventing the Bitcoin trust from being converted into a spot-based Exchange Traded Fund (ETF).
He made it clear that while the SEC “should certainly try to eliminate bad actors,” it should not impede “efforts to develop appropriate regulation.”
Doing our part to restore confidence in #crypto and #bitcoin cc @Grayscale @CraigSalm @jenn_rosenthal $GBTC
Sonnenshein wrote that “Bitcoin’s advancement into the U.S. regulatory perimeter” was hindered by the regulator’s failure to prevent such undesirable actors from entering the cryptocurrency industry.
He stated that as a result, American investors have been forced to utilize offshore crypto businesses “with less protection and oversight.”
“At the expense of U.S. investors, we are seeing the consequences of the SEC’s priorities play out in real time.”
The opinion piece by Sonnenshein comes as Grayscale is suing the SEC for having “arbitrarily denied” its plans to convert its Grayscale Bitcoin Trust (GBTC) to a spot exchange-traded fund.
The SEC argued that Grayscale’s proposal did not adequately safeguard against manipulation and fraud. Grayscale responded by asserting that the SEC was arbitrarily distinguishing between futures-traded products and spot-traded products.
Digital Currency Group (DCG), a crypto conglomerate experiencing financial difficulties, owns Grayscale.
Additionally, DCG owns the failed Genesis Trading, which was indicted by the SEC on January 12 for allegedly selling securities that were not registered.
John Reed Stark, a crypto skeptic and former SEC chief, called the phrase “regulation by enforcement” a “Bogus Big Crypto Catch Phrase” over the weekend.
He called the term “utter nonsense” and described it as a “misguided, deflective effort designed to tap into sympathetic libertarian and anti-regulatory mores” in a Jan. 22 post on Linkedin.
“Litigation and SEC enforcement are actually how securities regulation works,” he argued.
