Sec Chairman Gary Gensler Says Crypto Markets Require Transparency
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U.S. Securities and Exchange Commission Chairman Gary Gensler has criticized the crypto industry for bypassing registration requirements with the regulator.
In his closing remarks during aspeech at Columbia Law SchoolGensler emphasized the importance of disclosure requirements for market participants, citing Supreme Court Justice Louis Brandeis’ statement that “sunlight is supposed to be the best of disinfectants.””
Gensler expressed concern that certain participants in the crypto securities markets are attempting to evade registration requirements, resulting in a lack of mandatory disclosure.
He emphasized the need for transparency in crypto markets and noted that some disinfection measures could benefit the industry.
Gary Gensler Wages War on Crypto Firms
Over the past year, the SEC has filed numerous lawsuits against crypto firms, with SEC Chairman Gary Gensler repeatedly claiming that most cryptocurrencies should be classified as securities.
Firstly, the agency initiated civil proceedingsagainst Sam Bankman-Friedco-founder of FTX.
In addition to the case against Bankman-Fried, the SEC filed lawsuits against other major crypto players, includingBinance, its CEO Changpeng ZhaoandCoinbase.
Many industry players and stakeholders have called on the SEC to establish clear regulatory guidelines to promote innovation in the United States.
The SEC has reportedly issued subpoenas as part of its campaign to potentiallyclassify Ethereum (ETH) as a securityunder its regulatory authority.
“[T]There are still those here who would like to cut the SEC’s disclosure regime,” said the SEC Chairman.
“There are participants in crypto securities markets who attempt to circumvent these registration requirements. No registration means no mandatory disclosure. Many would agree that the crypto markets could use some disinfectant.”
In recent years, the SEC has made progress in approving crypto-related exchange-traded products for U.S. exchanges, including investment vehicles tied to ETH and Bitcoin futures as well as the first exchange-traded ones Spot Bitcoin Funds in January.
SEC Postpones Decision on Futures ETH ETF
In a separate development, the SEC has once again extended the deadline for deciding on approval of Grayscale’s Ethereum Futures Trust Exchange-Traded Fund (ETF).
The SECannounced that the previous deadlinewill be moved from March 31st to May 30th.
The ETF proposed by digital asset management firm Grayscale aims to invest in Ethereum futures contracts.
The SEC’s decision to extend the deadline follows its earlier postponement in December 2023, in which it sought additional public opinion on whether the ETF should be listed.
Grayscale proposed in September 2023 to list and trade shares of its Ethereum Futures Trust ETF under Arca Rule 8.200-E of the New York Stock Exchange.
Bloomberg ETF analyst James Seyffart suggested that Grayscale might use its futures ETF application as a strategic move to influence the SEC’s decision on approving its spot Ether ETF.
If the SEC were to approve Grayscale’s futures ETF, it could strengthen Grayscale’s case for approving its spot Ether ETF application.
Additionally, the SEC also postponed its decision on approving Grayscale’s spot Ether ETF and opened the application for public comments on January 25th.
