Gary Gensler Seeks Transparency From Cryptocurrency

Chairman of the United States Securities and Exchange Commission (SEC) Gary Gensler has criticized participants in the cryptocurrency industry for avoiding registration requirements with the regulatory agency.

In his concluding remarks of a speech at Columbia Law School, Gensler emphasized the importance of mandatory disclosure for market participants, referencing Justice Louis Brandeis’s quote that “sunlight is said to be the best of disinfectants.”

Gensler expressed concerns about some participants in the cryptocurrency securities market seeking to evade registration requirements, leading to a lack of mandatory disclosure.

He underscored the need for transparency in the cryptocurrency market, suggesting that some “disinfectant” measures could benefit the industry.

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Gary Gensler Declares War on Cryptocurrency Companies

Over the past year, the SEC has initiated numerous lawsuits against cryptocurrency companies, with Chairman Gensler consistently asserting that most cryptocurrencies should be classified as securities.

Specifically, the agency has filed civil suits against Sam Bankman-Fried, the co-founder of FTX.

In addition to the lawsuit against Bankman-Fried, the SEC has also sued other major cryptocurrency companies such as Binance, CEO Changpeng Zhao, and Coinbase.

Many within the industry and advocacy groups have called on the SEC to provide clear regulatory guidance to foster innovation domestically.

The SEC is said to have issued subpoenas to potentially classify Ethereum (ETH) as a security under its jurisdiction.

“There are still those who seek to undermine the SEC’s disclosure regime,” the SEC chairman said.

Some participants in the cryptocurrency securities market are seeking to evade these registration requirements. Not registering means not making mandatory disclosures. Many would agree that the cryptocurrency market may need a bit of ‘disinfectant.’

In recent years, the SEC has made progress in approving cryptocurrency-related exchange-traded fund (ETF) products on U.S. exchanges, including investment tools tied to ETH and Bitcoin futures contracts, along with the first physically-backed Bitcoin exchange-traded products in January.

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SEC Delays Decision on ETH Futures ETF

In another development, the SEC has once again extended the deadline for its decision on approving the Ethereum Futures Trust ETF proposed by Grayscale.

The SEC announced that the previous deadline of March 31 would be postponed to May 30.

The ETF proposed by digital asset management firm Grayscale aims to invest in Ethereum futures contracts.

SEC’s decision to extend the deadline comes after the agency delayed a previous decision in December 2023 when they sought additional public input on whether the ETF should be listed.

Grayscale proposed to list and trade shares of the Ethereum Futures Trust ETF under NYSE Arca Rule 8.200-E in September 2023.

James Seyffart, an ETF analyst at Bloomberg, believes Grayscale may be using this futures-based ETF registration as a strategy to influence the SEC’s decision on approving their Ether physically-backed ETF registration.

If the SEC approves Grayscale’s futures-based ETF, it could bolster Grayscale’s argument for approval of their physically-backed Ether ETF registration.

Furthermore, the SEC has also delayed its decision on whether to approve Grayscale’s physically-backed Ether ETF, opening a registration for public comment on January 25.