Gensler Slams Crypto Exchanges for Questionable Practices, Says ETH Spot ETFs 'Will Take Some Time'

SEC Chairman Gensler has expressed concerns about unethical conduct within crypto exchanges, noting that the introduction of ethereum spot ETFs will require additional time.

Gensler's comments were made during a June 5 interview on CNBC, where he also responded to Jim Cramer's questions about potential exchange-traded products for cryptocurrencies beyond bitcoin and ethereum.

Gensler criticizes crypto exchanges

Gensler stated that while the SEC had approved the associated 19-4b filings for ethereum spot ETFs last month, the launch of these products would “take some time.”

He crypto-regulation.html” data-wpel-link=”external” target=”_blank”>explained that ETF applications are going through normal procedural reviews, which inherently take time, but stopped short of providing a specific timeline for their market debut.

However, Gensler soon turned his attention to the broader cryptocurrency market with a more critical perspective. He criticized widespread unethical practices within crypto exchanges and emphasized that the market is still plagued by fraud and manipulation.

“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 stated, drawing a line between crypto exchanges and traditional ones like the New York Stock Exchange.

Referencing recent high-profile failures such as FTX and Celsius Network, Gensler stated that these types of illegal activities are still a big problem in the cryptocurrency market. He reaffirmed the SEC's dedication to upholding market integrity through continued enforcement actions and highlighted the agency's role as a civilian law enforcement agency.

Gensler highlights regulatory loopholes in the crypto market

While acknowledging some positive steps in regulation, Gensler expressed serious concerns about inadequate disclosure and regulation in the cryptocurrency industry.

“These tokens, whether well-known or obscure, have not provided the necessary disclosure required by law,” he noted, emphasizing that most cryptocurrencies do not meet the essential disclosure standards expected of regulated assets. This lack of transparency, Gensler argued, deprives investors of crucial information needed to make informed decisions.

During the interview, Cramer also questioned Gensler about the possibility of ETFs for several lesser-known cryptocurrencies, including meme coins like SushiSwap (SUSHI) and Bonk (BONK), as well as other tokens like Cardano, Cosmos, and MyNeighborAlice. Cramer noted that these tokens had traded for millions of dollars in recent activity and asked if they should have their own ETFs as well.

While Gensler did not provide specific answers, he emphasized his stance on the inadequate disclosure of many crypto tokens, implying that these tokens are often unregistered securities.

<!– ai CONTENT END 1 –>