In order to prevent stifling American innovation, Grayscale CEO Michael Sonnenshein emphasised the necessity for a well-balanced regulatory approach to cryptocurrencies.
Michael Sonnenshein, CEO of Grayscale Investments, raised the possibility of a bad conclusion for the US economy if the Securities and Exchange Commission (SEC) continues to regulate the cryptocurrency market one by one.
Sonnenshein stated in a recent interview with Fox Business that the SEC might exclude crypto companies from the nation by routinely using enforcement action.
“If every crypto issue needs to go to a court of law, then as a country, we are squashing the innovation taking place here,” Sonnenshein stated.
Sonnenshein underlined the need for clearer regulatory rules for stablecoins as well as unique definitions for crypto commodities and crypto securities in the market.
He believes this will prevent businesses from relocating outside the United States. Sonnenshein stated:“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 toward the asset class but instead embraces it.“
Similar remarks were made by Ripple CEO Brad Garlinghouse before the company partially defeated the SEC on July 13.
The SEC is “looking to kill” innovation and the cryptocurrency market in the US, according to Garlinghouse’s statement on June 17. He continued by saying that Ripple’s lawsuit is simply the first of many.
“Ultimately as our lawsuit comes to a close, for so many others it’s just starting, so the fight for clarity has to continue,“ Garlinghouse stated.
In spite of this, Sonnenshein is nevertheless upbeat about Congress’s ongoing attempts to give the business regulatory clarity.
“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,” Sonnenshein stated.
The Financial Innovation and Technology for the 21st Century Act was reportedly adopted by the House Financial Services Committee on July 31 with a vote of 35 to 15.
The measure proposes to establish registration guidelines for cryptocurrency businesses that fall within the purview of the SEC or the Commodity Futures Trading Commission.
Sonnenshein is confident in the direction Congress is taking, but he thinks the SEC should concentrate more on Bitcoin exchange-traded funds (ETFs).
He added that when deciding which Bitcoin ETF should be let onto the market, the SEC is using the incorrect criteria.
“When I think about the process that the SEC should be untaking 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.”
The SEC postponed making a judgement on the fate of the spot Bitcoin ETF that ARK Investment Management had proposed on August 11.
After the ARK 21Shares Bitcoin ETF was published in the Federal Register, the SEC opened a time for public comment.
This is the latest delay in the regulatory process for deciding whether to approve a spot crypto ETF in the United States.