Grayscale CEO Michael Sonnenshein claimed that the SEC is to blame for Bitcoin's slow and delayed growth.
According to Sonnenshein, the SEC was "late to the game" when it came to crypto regulation, which led to the demise of FTX.
Sonnenshein went on to say that the SEC's "one-dimensional approach to regulation via enforcement" is affecting the crypto industry.
The SEC's approach to crypto regulatory enforcement has slowed the growth of Bitcoin in the country.
Michael Sonnenshein, the CEO of a crypto asset management firm, criticizes the SEC in a letter published in The Wall Street Journal on January 23. Michael agreed with the argument that the SEC was "late to the game" in terms of crypto regulation and preventing FTX's bankruptcy. He said,
“'Late' doesn't do justice to what happened here. The issue is the Securities and Exchange Commission's one-dimensional enforcement-only approach to regulation.”
Grayscale is now suing the SEC for refusing the conversion of their Bitcoin trust to a spot-based Exchange Traded Fund (ETF).
Michael highlighted that while the SEC should endeavor to eliminate unethical actors, it should not hinder efforts to adopt proper regulation. He claimed that the regulator's failure to prevent such bad actors from entering the crypto industry slowed Bitcoin's development into the US regulatory perimeter.
Sonnenshein's opinion piece comes as Grayscale is suing the SEC for "arbitrarily denying" Grayscale's plans to convert its Grayscale Bitcoin Trust (GBTC) to a spot ETF.
The SEC claimed that Grayscale's approach did not provide adequate protection against fraud and manipulation. Grayscale responded that the SEC unfairly treated spot-traded items differently than futures-traded products.
Grayscale is owned by the cryptocurrency company Digital Currency Group (DCG), which is currently in financial trouble. DCG also controls the bankrupt Genesis Trading, which was charged by the SEC on January 12 for allegedly selling unregistered securities.