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SEC Chairman Gary Gensler said ethereum spot ETFs will “take some time” to launch despite approving associated 19-4b filings last month.
Gensler said ETF applications are going through normal procedures, which could take some time. He remained vague about an exact timeline for the launch.
The SEC chairman also criticized crypto exchanges for unsavory practices and said the market remains plagued by fraud and manipulation. He added that the SEC remains committed to ensuring integrity in all markets.
Gensler made the remarks during a June 5 conference. crypto-regulation.html”>interview on CNBC in response to Jim Cramer's questions about possible exchange-traded products for cryptocurrencies beyond bitcoin and ethereum.
Lack of adequate disclosure
Despite positive regulatory developments, Gensler expressed concern over 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, have not provided the necessary disclosure required by law.”
The SEC chairman highlighted that investors are not receiving the information necessary to make informed decisions, a fundamental principle of the securities markets.
Gensler also addressed the potential risks posed by crypto exchanges, which contrast sharply with traditional stock 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, creating significant conflicts of interest.
He said:
“Cryptocurrency exchanges are engaging in practices that would never be allowed on the New York Stock Exchange. “Our laws do not allow exchanges to trade against their customers, yet this is happening in the crypto space.”
Gensler emphasized the importance of protecting investors from fraud and manipulation, citing recent high-profile cases such as the FTX and Celsius Network collapses. He added that such illicit activity remains an important part of the cryptocurrency market and is a key area of focus for regulators.
He mentioned ongoing law enforcement actions and reiterated the SEC's role as a civilian law 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 capital markets, but it also poses risks of conflict, fraud and systemic problems if not managed properly.”
The interview also covered broader market issues, 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 recognizing the growth of private credit markets.
