SEC Chair Gary Gensler raised concerns regarding the ethical practices of cryptocurrency exchanges and indicated that the introduction of spot Ethereum exchange-traded funds (ETFs) will experience delays.
During an interview with CNBC on June 5, Gensler addressed inquiries from Jim Cramer regarding potential exchange-traded products for cryptocurrencies beyond Bitcoin and Ethereum. He disclosed that while the SEC approved the associated 19-4b filings for spot Ethereum ETFs last month, the launch of these products would “take some time.” Gensler cited ongoing procedural reviews as the reason for the delay but refrained from providing a specific timeline for their release.
However, Gensler shifted his focus to criticize the broader cryptocurrency market, highlighting unethical practices within crypto exchanges. He condemned these practices, comparing them unfavorably to the standards upheld by traditional exchanges like the New York Stock Exchange.
“Crypto exchanges are engaging in practices that would never be allowed on the NYSE. Our laws don’t permit exchanges to trade against their customers, yet this is happening in the crypto space,” Gensler emphasized.
Gensler underscored the prevalence of fraud and manipulation in the crypto market, citing recent high-profile failures like FTX and Celsius Network. He reiterated the SEC’s commitment to maintaining market integrity through ongoing enforcement measures and emphasized the agency’s role as a civil law enforcement entity.
Furthermore, Gensler highlighted regulatory gaps in the cryptocurrency market, expressing concerns about inadequate disclosure and regulation. He noted that many cryptocurrencies fail to meet the essential disclosure standards expected of regulated assets, depriving investors of crucial information needed for informed decision-making.
