Undoubtedly, US regulators have taken steps to safeguard bitcoin investors. But lately, a lot of red flags have been raised by neighborhood residents. There were rumors that something huge would be announced when the Department of Justice first said it would announce a major, international cryptocurrency enforcement action.
That wasnt the case, though. Community members were incensed by the governments action against the less well-known cryptocurrency exchange Bitzlato. In fact, some openly questioned whether the most recent event was intended to divert attention from the fact that they had no reason to suspect anything about FTX.
Grayscale CEO Highlights SECs Regulation Repercussions
Even established members of the group began sharing their perspectives about the matter, apart from the community. Grayscale executive Michael Sonnenshein criticized the SECs one-dimensional approach of regulation by enforcement in a letter to the Wall Street Journal.
He agreed with the claim that the SEC had been late to the game when it came to regulating the cryptocurrency market. The CEO of Grayscale also stated that the SEC should certainly try to get rid of dishonest people. However, he emphasized that it shouldnt be done at the expense of efforts to develop appropriate regulation.
Outlining the effects and demonstrating how it has impeded the industrys expansion, he remarked,
The SECs inaction has prevented Bitcoins advancement into the US regulatory perimeter, often forcing U.S investors offshore with less protection and oversight We are seeing the consequences of the SECs priorities play out in real-timeat the expense of U.S. investors.
Grayscale filed a lawsuit against the SEC in the middle of 2022 after it rejected its request to convert its Bitcoin trust into a spot-based Exchange Traded Fund.
Grayscale submitted documents to the SEC in October of last year in order to turn its Bitcoin Trust into an ETF. Following several extensions, the regulatory agency on Wednesday issued a rejection decision. Likewise, Grayscales application did not address the regulators concerns regarding how it would guard against market manipulation and safeguard the interests of investors and the general public.
Grayscale decided to quickly traverse legal waters when the rejection order was issued. The CEO of Grayscale, Michael Sonnenshein, announced on Twitter that a lawsuit had been filed to contest the SECs judgment.