The approach of the application of the regulation on cryptocurrencies by the United States Securities and Exchange Commission (SEC) has slowed the advance of bitcoin (BTC) in the countryaccording to the CEO of Grayscale Investments.
In a letter published in The Wall Street Journal on January 23, The head of the cryptocurrency asset management firm, Michael Sonnenshein, said he agreed with the claim that the SEC was “late to the game” when it came to regulating cryptocurrencies and preventing bankruptcies. FTXadding:
‘Late’ doesn’t capture what happened here. The problem is the Securities and Exchange Commission’s one-dimensional approach to regulating by applying the law.”
Grayscale has sued the SEC for denying the conversion of its Bitcoin trust fund into a spot exchange-traded fund (ETF).
He clarified that the SEC “should certainly try to weed out bad actors,” but should not hinder “efforts to develop adequate regulation.”.
Doing our part to re-instill trust and confidence in #bitcoin and #crypto DC @Grayscale @CraigSalm @jenn_rosenthal $GBTC pic.twitter.com/u72RHmGTmJ
— Sonnenshein (@Sonnenshein) January 23, 2023
Doing our part to restore trust in bitcoin and crypto cc @Grayscale @CraigSalm @jenn_rosenthal $GBTC pic.twitter.com/u72RHmGTmJ
The regulator’s inaction to stop the entry of these bad actors into the cryptocurrency industry “impeded the advance of bitcoin in the US regulatory perimeter”wrote Sonnenshein.
This has forced US investors to turn to offshore crypto firms “with less protection and oversight,” he said..
“We are seeing the consequences of the SEC priorities in real time, at the expense of US investors.”
Cointelegraph has contacted the Securities and Exchange Commission for comment on the situation.m
Sonnenshein’s op-ed comes as Grayscale is suing the SEC for having “arbitrarily denied” Grayscale’s plans to convert its Grayscale Bitcoin Trust (GBTC) into a spot ETF..
The SEC argued that Grayscale’s proposal did not sufficiently protect against fraud and manipulation.. Grayscale countered by saying that the SEC was arbitrarily treating spot-traded products differently than futures-traded products.
Grayscale is owned by cryptocurrency conglomerate Digital Currency Group (DCG), which is currently experiencing financial difficulties..
DCG also owns the bankrupt Genesis Trading company, which was indicted by the SEC on January 12 for the alleged sale of unregistered securities..
Over the weekend, John Reed Stark, a cryptocurrency skeptic and former head of the SEC, lashed out at the term “regulation by enforcement.”labeling it a “Fake Buzz Phrase”.
In a January 22 post on Linkedin, said the term was a “misguided and misguided effort designed to take advantage of sympathetic libertarian and anti-regulatory mores”, calling it “utter nonsense”.
He argued that “SEC litigation and enforcement is actually the way securities regulation works”.
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