Michael Sonnenshein, CEO of Grayscale Investments, recently voiced his concern about a potential negative outcome for the United States economy if the Securities and Exchange Commission (SEC) continues to take a one-by-one approach to regulating the cryptocurrency industry. During an interview with Fox Business, Sonnenshein noted that if every cryptocurrency issue needs to be taken to court, the U.S. will be crushing the innovation taking place.
Sonnenshein believes that the industry needs distinct definitions for crypto commodities and crypto securities, as well as clearer regulatory guidance for stablecoins. This, he adds, will prevent companies from relocating from the U.S. He added: “Adding further clarity to this would ensure that companies and people working on crypto don’t leave the U.S. because our regulatory environment is hostile towards the asset class but instead embraces it.”
Ripple CEO Brad Garlinghouse agreed with Sonnenshein’s comments prior to the SEC’s ruling of Ripple’s partial victory against the Commission on July 13th. Garlinghouse stated that the SEC was looking to “kill” innovation and the cryptocurrency industry in the U.S.
Sonnenshein is optimistic about the efforts of the U.S. Congress to provide regulatory clarity for the industry. He said: “A lot of this legislation that this congress could very well pass, could give the industry the actual clarity it needs to move forward in a way that embraces crypto.”
The House Financial Services Committee (FSC) approved the Financial Innovation and Technology for the 21st Century Act on July 31st, with a 35-15 vote. This act aims to establish registration rules for crypto firms under the jurisdiction of either the Commodity Futures Trading Commission (CFTC) or the SEC.
Sonnenshein believes that the SEC is assessing the wrong criteria when determining which Bitcoin ETF should be introduced to the market. He said: “When I think about the process that the SEC should be undertaking here, it’s really not to pick winners and losers, it is to ensure that all the right disclosures are put out there for investors.”
On August 11th, the SEC delayed its decision on the outcome of the spot Bitcoin ETF proposed by ARK Investment Management. After its publication in the Federal Register, the SEC initiated a public comment period for the ARK 21Shares Bitcoin ETF. This marks the most recent postponement in the regulatory decision-making process regarding the acceptance a spot crypto ETF in the U.S.
