SEC’s ‘one-dimensional’ approach slows Bitcoin progress: Grayscale CEO

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The U.S. Securities and Exchange Commission’s (SEC) approach of crypto regulatory enforcement has stalled the advancement of Bitcoin (BTC) in the country, according 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 a claim that the SEC was late. in-game regarding crypto regulation and preventing FTX from bankruptcy, add:

Late doesn’t capture what happened here. The problem is the one-dimensional approach to regulation by the enforcement of the Securities and Exchange Commissions.

Grayscale is currently suing the SEC for refusing to convert its Bitcoin trust into a cash Exchange Traded Fund (ETF).

He clarified that the SEC should certainly try to weed out bad actors, but that it should not hamper efforts to develop proper regulation.

Doing our part to restore trust in #bitcoin and #crypto cc @Grayscale @CraigSalm @jenn_rosenthal $GBTC pic.twitter.com/u72RHmGTmJ

— Sonnenshein (@Sonnenshein) January 23, 2023

The regulator’s inaction to prevent these bad actors from entering the crypto industry has prevented Bitcoin’s advancement into the US regulatory perimeter according to Sonnenshein.

This therefore forced US investors to relocate crypto businesses with less protection and oversight,” he said.

We see the consequences of SEC priorities unfolding in real time at the expense of US investors.

Sonnenshein’s opinion piece comes amid an ongoing lawsuit between Grayscale and the SEC for arbitrarily denying Grayscales’ plans to convert its Grayscale Bitcoin Trust (GBTC) into a spot ETF.

The SEC argued that the Grayscales proposal did not sufficiently protect against fraud and manipulation. Grayscale countered by saying that the SEC arbitrarily treats spot-traded products differently than futures-traded products.

Grayscale is owned by crypto conglomerate Digital Currency Group (DCG), which is currently struggling financially.

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

Related: SEC Leaked Personal Information About Crypto Miners During Investigation: Report

Over the weekend, John Reed Stark, a crypto skeptic and former head of the SEC, lambasted the regulatory term applying it, calling it the “Bogus Big Crypto Catch Phrase.”

In a Jan. 22 post on Linkedin, he said the term was a misguided, devious effort designed to tap into sympathetic libertarian and anti-regulatory mores by calling it utter nonsense.

He argued that SEC litigation and enforcement is actually how securities regulation works.

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