Gensler slams crypto exchanges for unsavory practices, says spot Ethereum ETFs will ‘take some time’

SEC Chair Gary Gensler said spot Ethereum ETFs will “take some time” to launch despite approving the associated 19-4b filings last month.

Gensler said the ETF applications are going through the normal procedures, which could take some time. He remained vague about an exact timeline for the launch.

The SEC chair also slammed crypto exchanges for unsavory practices and said the market remains rife with fraud and manipulation. He added that the SEC remains committed to ensuring integrity across markets.

Gensler made the statements during a June 5 interview on CNBC in response to Jim Cramer’s questions about potential exchange-traded products for cryptocurrencies beyond Bitcoin and Ethereum.

Lack of proper disclosure

Despite the positive regulatory advancements, Gensler expressed concern over the lack of proper disclosure and regulation in the broader crypto market. He said that most cryptocurrencies do not meet the “fundamental disclosure requirements” expected of a regulated asset class.

According to the SEC chair:

“These tokens, whether they’re well-known or obscure, have not provided the necessary disclosures required by law.”

The SEC chair stressed that investors are not receiving the information needed to make informed decisions, a fundamental principle of securities markets.

Gensler also addressed the potential risks posed by crypto exchanges, drawing a stark contrast with traditional stock exchanges like the New York Stock Exchange (NYSE).

The SEC chair also criticized crypto exchanges for allegedly engaging in activities that would not be allowed under US laws — such as trading against their customers, which creates significant conflicts of interest.

He said:

“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 the importance of protecting investors from fraud and manipulation, citing…