Crypto regulators ‘miss an opportunity’ with Bitcoin Spot ETF
NEW YORK, NEW YORK – NOVEMBER 3: (L-R) Christine Moy, Anthony Scaramucci, Michael Sonnenshein and Michael del Castillo attend the 2022 Forbes Iconoclast Summit at the New York Historical Society on November 3, 2022 in New York City. (Photo: Arturo Holmes/Getty Images)
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Investors see a future in cryptocurrencies, but US regulatory “inaction” is costing elected officials support, according to Michael Sonnenshein, CEO of Grayscale Investments. The digital asset firm is suing the Securities and Exchange Commission (SEC) after the regulator refused to allow the conversion of its $12 billion Bitcoin
“The oversight of regulators to take an existing product and bring it closer to the regulatory eye is a lost opportunity,” says Sonnenshein, who spoke at the first Forbes Iconoclast Summit on Thursday.
Grayscale has received support from crypto and traditional financial quarters in its legal battle against the SEC.
The largely anti-establishment crypto sector used to shy away from regulators, but to encourage new investors to take the digital plunge, it has sought clearer government standards. Meanwhile, President Joe Biden’s White House could encourage the SEC and other agencies to use existing law to regulate the industry in a non-adversarial way.
“Now regulation is a must.” says Christine Moy, head of digital assets at Apollo Global.
Investors, however, are looking past bills currently stalled in Congress and toward the upcoming midterm elections and the 2024 presidential election. “These are the minds of the voters,” says Sonnenshein of Grayscale’s suit against the SEC.
“Presidential candidates in 2024 will both be pro crypto,” adds Anthony Scaramucci, founder of SkyBridge Capital. “There are over 70 million people who own crypto and they don’t want to piss them off.”
Sam Bankman-Fried, CEO of the FTX exchange (and owner of 30% of Scaramucci’s SkyBridge), is making a concrete effort to fund candidates sensitive to crypto issues through 2024, but perhaps not to the full $1 billion he had been quoted which promise in August. “We play it by ear,” he said in an earlier panel, specifying that the total amount he would donate to political campaigns may well be less than $1 billion, but no more.
Young voters are likely to have the biggest impact on the choice of crypto-friendly candidates. A recent Grayscale poll showed that 80% of voters entering the primaries want more crypto regulations and 50% say crypto is the future of finance.
For Moy, it is this age demographic, those between the ages of 19-25, who are more likely to have their first investment in bitcoin, ethereum or even dogecoin.
“Think about the psychology of this generation,” she told attendees. “When they inherit generational wealth, how will they invest?”
Sonnenshein agrees, saying that “given those inclinations and those investor preferences, some will end up in asset classes like crypto.”
