The approach to crypto regulatory enforcement by the United States Securities and Exchange Commission (SEC) has stalled the development of Bitcoin (BTC) within the nation, in keeping with the CEO of Grayscale Investments.
In a letter printed in The Wall Street Journal on Jan. 23, the chief of the cryptocurrency asset administration agency, Michael Sonnenshein, stated he agreed with an assertion that the SEC was “late to the game” relating to crypto regulation and stopping the chapter of FTX, including:
“‘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 at present suiting the SEC for denying the conversion of its Bitcoin belief to a spot-based Exchange Traded Fund (ETF).
He clarified the SEC “should certainly try to eliminate bad actors” nevertheless it shouldn’t hinder “efforts to develop appropriate regulation.”
Doing our half to re-instill belief and confidence in #bitcoin and #crypto cc @Grayscale @CraigSalm @jenn_rosenthal $GBTC pic.twitter.com/u72RHmGTmJ
— Sonnenshein (@Sonnenshein) January 23, 2023
The inaction by the regulator to cease such dangerous actors from getting into the crypto trade “prevented Bitcoin’s advancement into the U.S. regulatory perimeter,” Sonnenshein wrote.
This has compelled American buyers to make use of offshore crypto companies “with less protection and oversight,” he stated.
“We are seeing the consequences of the SEC’s priorities play out in real-time — at the expense of U.S. investors.”
Cointelegraph has reached out to the Securities and Exchange Commission for remark.
Sonnenshein’s opinion piece comes as Grayscale is suing the SEC for having “arbitrarily denied” Grayscale’s plans to transform its Grayscale Bitcoin Trust (GBTC) to a spot ETF.
The SEC argued that Grayscale’s proposal didn’t sufficiently shield towards fraud and manipulation. Grayscale countered by saying that the SEC was arbitrarily treating spot-traded merchandise in a different way from futures-traded merchandise.
Grayscale is owned by the crypto conglomerate Digital Currency Group (DCG), which is at present present process monetary difficulties.
DCG additionally owns the bankrupt Genesis Trading, which was charged by the SEC on Jan. 12 for allegedly promoting unregistered securities.
Related: SEC leaked crypto miners’ private info throughout investigation: Report
Over the weekend, John Reed Stark, a crypto skeptic and former SEC chief, lambasted the time period “regulation by enforcement,” labeling it a “Bogus Big Crypto Catch Phrase.”
In a Jan. 22 publish on Linkedin, he stated the time period was a “misguided, deflective effort designed to tap into sympathetic libertarian and anti-regulatory mores,” and referred to as it “utter nonsense.”
He argued that “litigation and SEC enforcement are actually how securities regulation works.”