[Grayscale CEO says: Handing every encryption issue to the courts will stifle innovation]
Michael Sonnenshein, CEO of Grayscale Investments, warned that if the U.S. Securities and Exchange Commission (SEC) continues to carry out enforcement actions against the cryptocurrency industry one by one, it may harm the U.S. economy. He emphasized in a recent Fox Business interview that the move could drive cryptocurrency companies overseas.
Sonnenshein said the lack of clear definitions of crypto commodities, crypto securities and regulatory guidance on stablecoins could stifle innovation in the United States. “Further clarity will ensure that companies and people do not leave the United States because of a regulatory environment hostile to this asset class, but instead embrace it.”
Ripple CEO Brad Garlinghouse has made similar comments, saying the SEC is trying to stifle innovation and the cryptocurrency industry in the United States. But Sonnenshein is optimistic about Congress' efforts to provide regulatory clarity.
On July 31, the House Financial Services Committee approved the 21st Century Financial Innovation and Technology Act to establish registration rules for cryptocurrency companies. Sonnenshein is confident, but believes the SEC should focus on Bitcoin exchange-traded funds (ETFs).
"The real purpose of the SEC's evaluation should not be to pick winners and losers, but to ensure that all the correct disclosures are provided to investors," he explained.
On August 11, the SEC delayed its decision on ARK Investment Management’s proposed spot Bitcoin ETF, symbolizing the latest delay in the regulatory decision-making process regarding the approval of spot cryptocurrency ETFs in the United States.
