The head of Grayscale accused the SEC of "braking" the expansion of cryptocurrencies

He agreed with the claim that the SEC was “late in the game” regarding crypto regulation.

SEC 'should definitely try to eliminate unscrupulous players'

However, should not hinder "efforts to develop appropriate regulation"

Grayscale CEO Sonnenschein lashes out at U.S. authorities for so-called "coercive regulation"

Grayscale Investments CEO Michael Sonnenschein said the U.S. Securities and Exchange Commission (SEC) approach to enforcing crypto-currency regulations has stalled the advancement of bitcoin in the country. His words are quoted by The Wall Street Journal.

Sonnenschein agreed with the claim that the SEC was “late in the game” regarding cryptocurrency regulation and preventing FTX from going bankrupt.

“The word ‘late’ doesn’t reflect what happened here. The problem lies in the one-sided approach of the Securities and Exchange Commission to regulation through enforcement,” said the head of the company.

He clarified that the SEC "should definitely try to eliminate unscrupulous players" but should not interfere with "efforts to develop proper regulation."

“The inaction of the regulator to prevent attackers from entering the crypto industry has prevented the advancement of bitcoin,” Sonnenschein added. 

According to him, this forced American investors to use offshore cryptocurrency companies “with less protection and control.”

Sonnenschein's criticism stems from Grayscale suing the SEC for the company's refusal to convert Grayscale's Bitcoin Trust (GBTC) into a spot ETF. The Securities and Exchange Commission argued that Grayscale's proposal did not provide enough protection against fraud and manipulation. However, Grayscale says that the Securities and Exchange Commission arbitrarily treats spot trading products differently from futures products.

The legal battle is still ongoing, but the company is already considering an alternative to an exchange-traded bitcoin fund if Grayscale loses to the SEC. One alternative to Bitcoin-ETF involves a tender offer of up to 20% of GBTC shares. In addition, in the future, the company may offer GBTC contributors to buy back their shares at a specified price over a specified period of time. 

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