SEC Chair Warns Crypto Exchanges: Actions Speak Louder than Disclosures

US Securities and Exchange Commission (SEC) Chairman Gary
Gensler delivered a cautionary message to cryptocurrency exchanges,
underscoring that merely providing disclosures to investors does not immunize
them from regulatory scrutiny.

Crypto Disclosure Gaps and Regulatory Concerns

Speaking in an interview with CNBC yesterday (Wednesday),
Gensler stressed the inadequacy of disclosures alone, especially if crypto
exchanges are involved in activities like market manipulation or dissemination
of misleading information affecting investment decisions.

He highlighted the prevalent absence of disclosures from
numerous crypto firms, operating in a manner that would not meet the standards
expected in traditional financial markets. The SEC has intensified its enforcement efforts in the
digital assets realm, particularly following the collapse of cryptocurrency
exchange FTX in late 2022.

The agency is actively pursuing legal actions against some
of the major players in the US crypto market, including an ongoing case against
Coinbase, the largest exchange in the country by daily trading volume.

Balanced Approach on Crypto ETFs

Gensler adopted a nuanced approach when discussing the
potential for crypto exchange-traded funds (ETFs), citing examples like those
involving the Solana memecoin BONK.

This moderated stance aligns with the SEC’s recent green
light on spot Ethereum ETFs, a decision that surprised many given previous
considerations of Ethereum as an unregistered security. The SEC’s approval of Ethereum ETFs has spurred discussions
on the agency’s openness to considering other altcoin spot ETFs.

Observers speculate that political dynamics, including the
influence of the crypto lobby and the impending 2024 election, may have
contributed to the SEC’s evolving position.

This article was written by Tareq Sikder at

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