Grayscale CEO says SEC’s overprotection limits bitcoin’s growth in the US

Crypto Regulation
Grayscale CEO says SEC’s overprotection limits bitcoin’s growth in the US

Grayscale CEO Michael Sonnenshein thinks the moves taken by the US financial watchdog, the Securities and Exchange Commission (SEC), are limiting the growth of bitcoin (BTC) in the United States. The firm’s executive also mentioned that the SEC was already late in preventing the fall of FTX.

Grayscale CEO Michael Sonnenshein has expressed deep concerns about SEC’s recent moves to enhance cryptocurrency regulations in the US. The senior Graysacle exec stated that the US financial watchdog was moving in the wrong direction, ultimately affecting the growth of bitcoin and other cryptocurrencies in the country.

Michael Sonnenshein accused the SEC of having a ‘one-dimensional approach’ to cryptocurrencies and that the commission was already late in preventing the recent fall of the FTX exchange and its affiliated companies.

His motion supports the views of Hal Scot and John Gulliver, who claim the SEC failed to “police” FTX before its downfall, according to a Wall Street Journal article published on Jan. 23:

“The SEC is late to the game. The problem is the Securities and Exchange Commission’s one-dimensional approach of regulation by enforcement.”

Hal Scott and John Gulliver from the Committee on Capital Markets

Grayscale has been in legal pursuit with the SEC urging the latter to grant the firm legal authorization to convert from a cryptocurrency management firm to a bitcoin Exchange Traded Fund (ETF). The SEC denied the firm’s request stating that Grayscale did not provide adequate evidence to show its protection of customer funds from fraud and market manipulation. 

Moreover, Grayscale refused to share proof-of-reserves in November, citing security concerns from sharing on-chain wallet information. In a public report issued by the firm, Grayscale announced that customer deposits were safe and secure, reflecting on previous public files and approved by third-party auditors.

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Samuel Mbaki Wanjiku

Samuel is an adventurous person who likes to explore topics in-depth and learn new things each day. His passion lies in gaining knowledge to help transform the world through his writing skills. He also believes in blockchain technology and its potential to usher in a cashless society. Currently, he is pursuing a Computer Science Bachelor’s degree driven by his fascination with emerging technologies. He has writing experience of about three years in different fields and two in blockchain technology.