Regulation
Gensler slams crypto exchanges for unsavory practices, says Ethereum spot ETFs ‘will take a while’
President of the SEC Gary Gensler said place Ethereum Launching the ETFs “will take some time” despite the approval of associated 19-4b filings last month.
Gensler said ETF applications were following normal procedures, which could take some time. He remained vague on the exact launch timeline.
The SEC chairman also criticized crypto exchanges for their unsavory practices and said the market remains full of fraud and manipulation. He added that the SEC remains committed to ensuring the integrity of the markets.
Gensler made the statements during a June 5 meeting interview on CNBC in response to Jim Cramer’s questions about potential exchange-traded products for cryptocurrencies beyond Bitcoin and Ethereum.
Lack of proper disclosure
Despite the positive regulatory advancements, Gensler expressed concern about the lack of proper disclosure and regulation in the broader crypto market. He said most cryptocurrencies do not meet the “fundamental disclosure requirements” expected of a regulated asset class.
According to the president of the SEC:
“These tokens, whether well-known or obscure, failed to provide the necessary information required by law.”
The SEC chairman stressed that investors are not receiving the information necessary to make informed decisions, a fundamental principle of securities markets.
Gensler also addressed the potential risks posed by crypto exchanges, contrasting sharply with traditional exchanges like the New York Stock Exchange (NYSE).
The SEC chairman also criticized crypto exchanges for allegedly engaging in activities that would not be permitted under US laws, such as trading against their customers, which creates significant conflicts of interest.
He said:
“Cryptocurrency exchanges engage in practices that would never be permitted on the NYSE. Our laws do not allow exchanges to trade against their customers, and yet this is happening in the crypto space.
Gensler stressed the importance of protecting investors from fraud and manipulation, citing recent high-profile cases such as the collapse of FTX and Celsius Network. He added that these illicit activities continue to make up a significant part of the crypto market and are a key area of focus for regulators.
He mentioned ongoing enforcement actions and reiterated the SEC’s role as a civil enforcement agency committed to maintaining market integrity.
AI and fair competition
Gensler’s comments also touched on artificial intelligence (AI) and its implications for financial markets. He described AI as the most transformative technology of our time, but warned of the risks associated with its use.
According to Gensler:
“AI can improve financial markets, but also poses risks of conflict, fraud and systemic problems if not properly managed. »
The interview also covered broader market-related topics, including the balance between public and private markets and the need for fair competition.
Gensler highlighted the importance of public markets in providing transparent and accessible investment opportunities, while also recognizing the growth of private credit markets.