Markets
SEC Chairman Gensler Warns Crypto Exchanges About Enforcement
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US Securities and Exchange Commission (SEC) Chairman Gary Gensler has issued a warning to cryptocurrency exchanges, stating that providing disclosures to investors does not protect them from regulatory enforcement.
Gensler emphasized in a CNBC interview on Wednesday that disclosures alone are inadequate if crypto exchanges engage in activities such as market manipulation or disseminate misleading information that affects investment decisions.
He also highlighted that many crypto companies do not provide any disclosures, operating in a way that would be unacceptable in conventional financial markets.
The SEC has stepped up its enforcement actions in the digital asset space, especially following the collapse from the FTX cryptocurrency exchange in late 2022.
The agency is actively involved in litigation against some of the largest players in the US crypto market, including a case against Coinbase, the largest exchange by daily trading volume in the United States.
Gensler showed a more nuanced approach when discussing the potential for crypto ETFs, such as those involving the Solana BONK memecoin.
This softer tone aligns with the SEC’s recent approval of spot Ethereum ETFs, a decision that was unexpected by many due to previous considerations of Ethereum as an unregistered security.
The SEC’s approval of Ethereum ETFs has sparked discussions about the agency’s willingness to consider other altcoin spot ETFs.
Political dynamics, including the influence of the crypto lobby and the upcoming 2024 elections, are believed to have influenced the evolution of the SEC’s position.