Coinspeaker SEC Chair: Disclosures Alone Won’t Protect Crypto Exchanges from Regulatory Action
In an interview on Wednesday, June 5, Gary Gensler, the chairman of the US Securities and Exchange Commission (SEC) stated that the federal securities would continue to pursue enforcement actions against crypto exchanges, even if they have submitted disclosures of their products’ risk to retail investors.
During his CNBC interview, Gary Gensler stated that disclosures by crypto exchanges don’t provide them immunity from regulatory action in the case of any market manipulation activities. Furthermore, they could also face lawsuits in the case they publicize “misleading” information thereby luring traders to pour money into the products which they themselves wouldn’t invest in, otherwise.
“Disclosure doesn’t necessarily protect a bad actor,” Gensler said. “You can’t just simply disclose that away.”
On Wednesday, Gensler noted that the majority of crypto companies still fail to issue any disclosures. In an interview with CNBC, he highlighted that crypto exchanges have been operating in ways that would be unacceptable for trading platforms in traditional financial markets.
SEC Chief Breaks Silence on Ethereum ETFs
During his CNBC interview on Wednesday, Gary Gensler broke the silence regarding the expected timeline for the approval of the S-1 registrations for spot Ethereum ETFs. He indicated that the review process is likely to be lengthy thereby leading to delay in the approval process of the ETFs. The SEC Chair said:
“Ethereum had been traded on the Chicago Mercantile Exchange futures for three-plus years. And the staff looked at that closely, and that was approved. Now, the underlying exchange traded products (ETPs) still need to go through a process to have the disclosure about that. That will take some time, but they’re working on that right now.”
Amid the deadline for the S1- submissions last Friday, top industry giants VanEck and BlackRock submitted their S-1 drafts. Several industry insiders believe that there would be at least two rounds of draft filing before the SEC makes the final decision.
Unlike the relatively straightforward approval process for Bitcoin ETFs, the altcoin market faces more uncertainty, according to market observers. While unanimous approval could be a significant milestone, recent developments have added to the ambiguity. For instance, Hashdex’s withdrawal of its Ethereum ETF application for undisclosed reasons has led to questions about the future of Ethereum ETFs.
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SEC Chair: Disclosures Alone Won’t Protect Crypto Exchanges from Regulatory Action