Messari Founder: “Crypto ETF Disapproval is SEC Fraud”

The founder of the analytical company Messari, Ryan Selkis, called the reluctance of the US Securities and Exchange Commission (SEC) to approve ETFs linked to cryptocurrencies to be fraudulent.

Ryan Selkis stated that last year users lost $1 billion of funds as a result of cryptocurrency fraud. However, this figure is not that big compared to how much investors are losing due to the unfriendly approach of the SEC to the cryptocurrency industry. 

According to Selkis, due to the regulator's bias towards cryptocurrency ETFs, Grayscale investors suffered losses in the amount of $7 billion, and this can be called no less fraud on the part of the agency. Messari founder believes that SEC Chairman Gary Gensler is prioritizing expanding power over the crypto sector instead of really focusing on protecting investors.

$1bn was lost to crypto fraud last year.

$7bn has been lost to the SEC's fraud in failing to approve a spot ETF at the expense of Grayscale investors.@GaryGensler doesnt care about protecting investors, promoting capital formation, or making markets fair. He cares about power.

— Ryan Selkis (@twobitidiot) August 30, 2022

Selkis' tweet was responded to by attorney John E Deaton. He represents over 72,000 XRP holders in a lawsuit between the SEC and Ripple. Deaton wrote that by accusing Ripple of offering unregistered securities, the SEC caused losses to XRP holders in the amount of $15 billion. Due to the class-action lawsuit against Ripple, US cryptocurrency exchanges were forced to exclude trading pairs with XRP.

And $15B was lost because the SEC intentionally chose not limit the allegations against Ripple to specific sales made by Ripple and its executives but instead alleged all XRP including secondary market sales of XRP are unregistered securities. https://t.co/o3GGANtaOM

— John E Deaton (213K Followers Beware Imposters) (@JohnEDeaton1) August 30, 2022

Recently, Forbes journalist Roslyn Layton also lambasted the agency for its reluctance to clarify the regulation of the emerging digital asset market. According to Layton, the Commission prefers to levy fines, rather than deal with direct duties - regulation.

The SEC is indeed in no rush to approve bitcoin spot ETFs for fear of market manipulation. For this reason, the agency has repeatedly postponed the decision on the applications of various companies to launch this investment product. In April, Grayscale CEO Michael Sonnenshein said the SEC's actions violated the Administrative Procedures Act.