SEC Chair: Disclosures Alone Won’t Protect Crypto Exchanges from Regulatory Action

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As a seasoned crypto investor with a keen interest in regulatory developments, I find Gary Gensler’s recent statements on crypto exchanges and disclosures concerning. While I understand the importance of transparency and investor protection, it is disheartening to see that even disclosures may not shield bad actors from regulatory action. The ongoing pursuit of enforcement actions against non-compliant exchanges highlights the need for due diligence on the part of investors.

During a interview on June 5, 2023, Gary Gensler, head of the US Securities and Exchange Commission (SEC), expressed that the federal securities regulatory body will persist in taking enforcement measures against crypto exchanges, irrespective of their disclosures regarding product risks to retail investors.

In a recent interview with CNBC, Gary Gensler made it clear that crypto exchanges’ disclosures do not shield them from regulatory scrutiny if they engage in market manipulation. Additionally, they could be held liable for disseminating misleading information that attracts investors to invest in products the exchanges themselves would not touch, potentially leading to lawsuits.

“Gensler pointed out that disclosing information isn’t always enough to shield wrongdoers. Disclosure alone doesn’t erase the harm caused.”

During a conversation with CNBC on a Wednesday broadcast, Gensler pointed out that most crypto firms have yet to provide any disclosures. He emphasized that the methods of operation for crypto exchanges are not in line with the standards expected in conventional financial market trading platforms.

SEC Chief Breaks Silence on Ethereum ETFs

In his interview with CNBC on Wednesday, Gary Gensler hinted at the potential timeline for approving Ethereum spot ETFs’ registration under the Securities and Exchange Commission (SEC). He suggested that the assessment could take a considerable amount of time, possibly resulting in delays for the approval of these ETFs. The SEC chairman added:

As an analyst, I’ve noticed that Ethereum has been tradable on the Chicago Mercantile Exchange (CME) futures market for over three years. The relevant authorities have reviewed this extensively and have given their approval. However, it is important to note that the underlying exchange-traded products (ETPs) linked to Ethereum still need to undergo a disclosure process. This is a necessary step to provide transparency about these financial instruments, which is currently in progress.

Last Friday marked the deadline for S1 submissions from leading industry players VanEck and BlackRock. Based on insights from industry sources, we anticipate that there will likely be at least two rounds of draft filings prior to the Securities and Exchange Commission (SEC) rendering their final decisions.

As a crypto investor, I’ve noticed that the approval process for Bitcoin ETFs can be more straightforward compared to altcoins. However, the uncertainty surrounding the latter is increasing, according to market insiders. Although unanimous approval would be an important achievement, recent events have clouded the situation even further. For example, Hashdex’s unexpected withdrawal of its Ethereum ETF application has left many wondering about the future prospects of Ethereum ETFs.

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2024-06-06 11:05