Ethereum ETF Approval Process 'Going Smoothly': Gensler

Ethereum ETF Approval Process 'Going Smoothly': Gensler

SEC Chair reiterates concerns about fraud in the crypto industry in a Bloomberg interview.

ETF.com
|
Contributing Editor
|
Reviewed by: etf.com Staff
,
Edited by: Ron Day

Securities and Exchange Commission Chair Gary Gensler reassured crypto markets yesterday that the agency's review of spot Ethereum ETFs is on track. 

Gensler told a Bloomberg Invest audience that consideration of multiple proposals for spot Ethereum ETFs is "going smoothly," while in a separate Financial Times interview he signaled that the funds would soon begin trading. 

"There's about to be a second," Gensler told the FT, referencing the funds that will depend on the ongoing price of ether, the cryptocurrency of the Ethereum blockchain. 

Read More: Gensler Sees Ethereum Spot ETF Approval This Summer

Gensler's comments come less than two weeks after he told a Senate subcommittee that approvals would occur this summer and roughly a month after the SEC approved a rule change that represented the most significant obstacle to their listing on exchanges. The agency is currently communicating with the issuers about their S-1 disclosure statements, largely considered a formality. Bloomberg Senior ETF Analyst Eric Balchunas has predicted that the spot Ethereum ETFs would begin trading July 2. 

The 19b-4 rule change addressed concerns about fraud and investor protections, longstanding issues for the agency that held up the wildly successful spot bitcoin ETFs that have generated $14.4 billion in inflows in six months.

Gensler Ongoing Concerns

In his remarks at the Bloomberg conference in New York and to the FT, Gensler reiterated his worries about crypto investments.  

"There are a lot of folks that are not living within our securities laws," Gensler said. "This is a field that's sort of built up on a non-complaint model. And it's not ticky tacky. It's about real protections for investors and for other people that want access to the capital markets."

Read More: Spot Ethereum ETF Debuts Hinge on Fast Replies: Gensler

In his interview with the FT, Gensler said the industry wasn't providing suitable public disclosures about projects, "insiders, and the conflicts insiders have."

He added that "the industry has got a lot of scam and fraud, and I think it’s not just a coincidence."

ProShares Ether Strategy (EETH) 1-Month Price

Gensler critics from the crypto industry who believe the SEC has been heavy-handed were quick to find fault with his comments Tuesday. 

"Absolute nonsense coming from @GaryGensler today," wrote Brad Garlinghouse, the CEO of crypto protocol Ripple, in an X post

Ether was trading flat on Wednesday at about $3,365, but it is off more than 6% over the past week, according to crypto data provider CoinMarketCap—part of a wider downturn in crypto markets.

James Rubin is a contributing editor for etf.com, where he produces the Morning Exchange and Weekly Exchange newsletters. A longtime financial writer, editor and book author, he formerly held positions as a news and markets editor for the Americas at CoinDesk, where he focussed on cryptocurrencies. 

He provided editorial guidance for a Wall Street Journal best-selling book on Bitcoin and oversaw a startup newsroom focused on digital financial assets. He has edited for TheStreet and Unchained, where he wrote daily news stories about the trial of fallen crypto entrepreneur Sam Bankman-Fried. His writing has also appeared in The Hollywood Reporter, Forbes.com, AdWeek, Bankrate, The Financial Brand and The Wall Street Journal. He has also written for Forbes Insights and the Economist Intelligence Unit, including papers presented at World Economic Forums in Davos and Mumbai. 

James is the co-author of The Urban Cyclist’s Survival Guide (Triumph Books) and has been interviewed about bike safety on a number of NPR affiliates. In a prior career, Rubin was a world-ranked tennis player, once competing in Wimbledon’s qualifying rounds. He speaks fluent German and is a graduate of the Columbia University Graduate School of Journalism and received his BA at Columbia University.