Home CryptocurrencyBitcoin SEC’s ‘one-size-fits-all’ approach is slowing Bitcoin’s development: Grayscale CEO

SEC’s ‘one-size-fits-all’ approach is slowing Bitcoin’s development: Grayscale CEO

by SuperiorInvest

The United States Securities and Exchange Commission’s (SEC) approach to cryptocurrency regulation has halted Bitcoin’s progress (BTC) in the country, according to the CEO of Grayscale Investments.

IN letter published in The Wall Street Journal on January 23, the head of a cryptocurrency asset management firm, Michael Sonnenshein, said he agreed with the claim that the SEC was “late to the game” on cryptocurrency regulation and preventing FTX bankruptcyadds:

“Late” doesn’t capture what happened here. The problem is the Securities and Exchange Commission’s one-dimensional approach to regulation through enforcement.”

Grayscale is currently suing the SEC for denying the conversion of its bitcoin trust to a spot-based Exchange Traded Funds (ETFs).

He clarified that the SEC “should certainly try to eliminate bad actors” but should not hinder “efforts to create appropriate regulation.”

The regulator’s inaction to stop such bad players from entering the crypto industry “prevented bitcoin from advancing into the US regulatory circuit,” according to Sonnenshein.

This has forced US investors to offshore crypto businesses “with less protection and oversight,” he said.

“We’re seeing the consequences of the SEC’s priorities play out in real time — to the detriment of American investors.”

Cointelegraph has reached out to the Securities and Exchange Commission for comment.

Sonnenshein’s opinion comes amid an ongoing lawsuit between Grayscale and the SEC for “arbitrarily denying” Grayscale plans to convert its Greyscale Bitcoin Trust (GBTC) to spot ETFs.

The The SEC argued Grayscale’s design did not adequately protect against fraud and manipulation. Shades of gray countered said the SEC arbitrarily treated spot-traded products differently from futures-traded products.

Grayscale is owned by the crypto conglomerate Digital Currency Group (DCG), which is currently undergoing financial problems.

DCG also owns the bankrupt Genesis Trading, which was charged by the SEC on Jan. 12 for allegedly selling unregistered securities.

Related: SEC leaked personal data of cryptocurrency miners during investigation: Report

Over the weekend, John Reed Stark, crypto-skeptic and former head of the SEC criticized the term “regulation by enforcement,” which called it a “big crypto catchphrase.”

In a Jan. 22 post on Linkedin, he said the term was a “misleading, skewing effort designed to tap into sympathetic libertarian and anti-regulatory mores” and called it “absolute nonsense.”

He argued that “SEC litigation and enforcement is what securities regulation actually does.”

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