Using courts for every crypto issuance will squash innovation: Grayscale CEO
Grayscale Investments CEO, Michael Sonnenshein, highlighted a potential negative outcome for the United States economy if the Securities and Exchange Commission (SEC) continues to take a one-by-one approach to regulating the cryptocurrency industry.
During a recent interview with Fox Business, Sonnenshein expressed that the SEC could drive crypto firms out of the country by constantly resorting to enforcement actions against the industry.
“If every crypto issued needs to go to a court of law, then we are squashing the innovation taking place here,” Sonnenshein stated.
Likewise, Ripple CEO Brad Garlinghouse echoed similar comments prior to the partial victory of Ripple, which was decided on July 13.
On June 17 Garlinghouse expressed that the SEC is “looking to kill” innovation and the cryptocurrency in the U.S. He further explained as the Ripple lawsuit is coming to a close, it is only the beginning for many others.
“Ultimately as our law suit comes to a close, for so many others its just starting, so the fight for clarity has to continue,” Garlinghouse stated.
Related: SEC decision on Bitcoin ETFs won’t leave out Wall Street giants
However, Sonnenshein holds a positive outlook regarding the ongoing developments Congress is taking to provide regulatory clarity for the industry.
“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.
On July 31, Cointelegraph reported that the House Financial Services Committee (FSC) approved the Financial Innovation and Technology for the 21st Century Act with a 35-15 vote.
The act aims to establish registration rules for crypto firms under the jurisdiction of either the Commodity Futures Trading Commission (CFTC) or the SEC.
Sonnenshein pointed out that the SEC is assessing the wrong criteria when determining which Bitcoin ETF should be introduced to the market.
“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.”
Sonnenshein further explained during the interview that there is room for several spot Bitcoin products on the market.
“We’ve been ready for a world where there are multiple spot Bitcoin products, where there are multiple bitcoin future products on the market” Sonnenshein stated.
He argued that the SEC’s previous approval of the Bitcoin Futures ETF implies it does in fact have an adequate oversight of the Bitcoin market.
“They do not believe there is sufficient surveillance in the underlying Bitcoin market[…]The SEC already has the tools to approve spot Bitcoin ETFs.”
On Aug. 11, the SEC delayed its decision on the outcome of the spot Bitcoin ETF proposed by ARK Investment Management.
After its publication in the Federal Register, the SEC initiated a public comment period for the ARK 21Shares Bitcoin ETF.
This marks the most recent postponement in the regulatory decision-making process regarding the approval or disapproval of a spot crypto ETF in the U.S.
Magazine: SBF ordered to jail, Bitcoin ETF delayed and SEC to appeal Ripple case: Hodler’s Digest, Aug. 6-12
Shuttered crypto exchange Garantex is reportedly back under a new name after laundering millions in ruble-backed stablecoins and sending them to a freshly created exchange, according to a Swiss blockchain analytics company.
Global Ledger claims the operators of the Russian exchange have shifted liquidity and customer deposits to Grinex, which they say is “Garantex’s full-fledged successor,” in a report released to X on March 19.
“We can confidently state that Grinex and Garantex are directly connected both onchain and offchain.”
“The movement of funds, including the systematic transfer of A7A5 liquidity, the use of one-time-use wallets, and the involvement of addresses previously associated with Garantex, provides clear onchain proof of their link,” the Global Ledger team said in the report.
After completing its investigation on March 13, Global Ledger says it had found onchain data showing Garantex laundered over $60 million worth of ruble-backed stablecoins called A7A5 and sent them to addresses associated with Grinex.
Global Ledger claims Garantex has moved all its funds over to a newly launched exchange and is back in business. Source: Global Ledger
“In this case, the burning and subsequent minting process was used to launder funds from Garantex, allowing new coins to be minted from a system address with a clean history,” the team said.
A Garantex manager also reportedly told Global Ledger that customers have been visiting the exchange office in person and moving funds from Garantex to Grinex.
“Additionally, offchain indicators, such as transactional patterns, commentaries and exchange behaviors, further reinforce this connection,” it said.
The report also points to a description of Grinex on the Russian crypto tracking site CoinMarketRating, claiming that the owners of Garantex created it. The reports said this shows “Grinex is not an independent entity but rather a full-fledged successor to Garantex, continuing its financial operations despite the exchange’s official shutdown.”
Source: Global Ledger
By March 14, the volume of incoming transactions on Grinex was nearly $30 million, according to Global Ledger. CoinMarketRating shows that the trade volume for the month is now over $68 million, with spot trading topping $2 million.
The US Department of the Treasury’s Office of Foreign Assets Control first hit Garantex with sanctions in April 2022 for allegedly money laundering violations.
Related: US, UK, Australia sanction Zservers for hosting crypto ransomware LockBit
On March 6, the US Department of Justice collaborated with authorities in Germany and Finland to freeze domains associated with Garantex, which they claim processed over $96 billion worth of criminal proceeds since launching in 2019.
Stablecoin operator Tether also froze $27 million in Tether (USDT), on March 6 which forced Garantex to halt all operations, including withdrawals.
Only a few days later, on March 12, officials with India’s Central Bureau of Investigation arrested Aleksej Bešciokov, who allegedly operated Garantex, on US charges that included conspiracy to commit money laundering.
Magazine: How crypto laws are changing across the world in 2025
Ministers are drawing up plans restricting foreign donors from giving unlimited funds to UK political parties, Sky News understands.
Currently, political parties can accept donations from any company registered in the UK – and foreign donors can and have used these companies to make indirect contributions.
The rules allow for British companies to be used in this way even if they don’t make any money at all.
However, Sky News understands that officials are currently looking at restricting donations based on how much money a company makes – either using a profit or a share of revenue to calculate a potential cap for the amount each UK business can give.
The government says this is in line with its manifesto pledge to “protect democracy by strengthening the rules around donations to political parties”.
Senior government sources have told Sky News these changes are partially about Elon Musk.
Officials are said to be anxious about the rumoured donation of $100m (about £80m) that Musk has suggested he would make to Reform UK.
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Nigel Farage says ‘Musk is going to support Reform’
The government’s thinking is that the tech billionaire is likely to do this just before the next election, and they hope they can pass their Elections Bill – the legislation through which the donation loophole would be closed – through parliament before that happens.
The bill would enter parliament in the next session, but ministers have told MPs that they should expect an update to these plans within months.
Musk’s donation would be an astronomical amount in the context of British politics.
The sum would trump all political donations that have been made to any political party this year – and would inevitably make a big impact on campaigning.
Elon Musk is not on the electoral register and the British arm of his company X – X.AI London Limited – has not yet made any money.
Under the proposed changes, this avenue of donating money to Reform UK would not be possible.
Reform UK’s total received donations for 2024 would be considerably higher with £80m from Elon Musk
A government source said this is just one of the options on the table, adding that another change they are considering will mean enhanced due diligence checks on donations from unincorporated associations.
In exclusive polling, Sky News has found that any money given to parties by foreign donors is incredibly unpopular.
A total of 77% of respondents thought foreign nationals who are not registered to vote in the UK should not be allowed to donate to political parties, while only 7% thought they should be.
Even looking specifically at Reform UK voters, who would likely benefit from an Elon Musk donation, the percentage is roughly the same: 73% said they shouldn’t donate to British politics at all, while 7% said they should.
A total of 77% of respondents said foreign nationals should not be allowed to donate to UK political parties
There is a lot of cash swirling all around Westminster and foreign money can and does enter UK politics.
Transparency International found almost £1 in every £10 donated to parties and politicians came from unknown or dubious sources between 2001 and 2024.
Whatever the motivation, these changes could bring greater transparency to what’s behind any murky money swirling into Westminster.
Crypto regulations must be enacted through an act of Congress to become permanent and meaningful pieces of legislation, according to former Congressman Wiley Nickel.
In an exclusive video interview with Cointelegraph’s Turner Wright, Nickel urged bipartisan collaboration to push through comprehensive crypto regulations. The former Congressman added:
“I think it’s really important for anybody who cares about this issue to step back and realize that if you want lasting change in Washington, you must move legislation through Congress. Otherwise, if you’re talking about executive orders, it will just go back and forth.”
“You don’t want to have the mess that we saw just months ago with Gary Gensler’s SEC — you need to get legislation through Congress,” Nickel reiterated.
President Trump’s Jan. 23 executive order establishing the Working Group on Digital Assets, which also prohibited the development of a central bank digital currency (CBDC), and the order establishing a Bitcoin strategic reserve alongside a separate crypto stockpile, were both examples of executive actions that can be reversed at a later date.
Former Congressman Wiley Nickel is pictured sitting second from the left at the Blockworks Digital Asset Summit. Source: Cointelegraph
Related: Congress on track for stablecoin, market structure bills by August: Blockchain Association
Both chambers of Congress rush to push through meaningful legislation
Rep. Tom Emmer, the majority whip of the United States House of Representatives, reintroduced legislation banning a CBDC in the US on March 6.
Wyoming Senator Cynthia Lummis also reintroduced the Bitcoin Act in March, which builds upon an earlier bill of the same title but allows the US to purchase more than 1 million Bitcoin (BTC).
Senator Lummis’ Bitcoin Act of 2025. Source: Senator Cynthia Lummis
Rep. Byron Donalds recently announced that he would draft legislation to codify the Bitcoin strategic reserve into law — shielding President Trump’s original executive order from being overturned by a future administration.
On March 12, the House of Representatives repealed the IRS broker rule requiring decentralized finance platforms to report information to the Internal Revenue Service in a 292-131 vote.
Speaking at this year’s Blockworks Digital Asset Summit, Democrat Rep. Ro Khanna said that Congress should be able to pass comprehensive crypto regulation in 2025, including a stablecoin bill and a market structure bill.
Magazine: SEC’s U-turn on crypto leaves key questions unanswered
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