The US Securities and Exchange Commission (SEC) Chairman, Gary Gensler, spoke about cryptocurrencies like Bitcoin and the market for them.
In a webinar conducted today, U.S. Securities and Exchange Commission (SEC) Chairman Gary Gensler expressed his concerns about the practices of cryptocurrency exchanges at a time when many businesses are attempting to establish the first Bitcoin exchange-traded fund (ETF) in the country.
Gensler was questioned about Coinbase’s (the biggest US crypto exchange) potential part in certain ETF filings. Companies like BlackRock and Fidelity picked Coinbase as a market surveillance-sharing partner in the hopes of swaying the SEC in favour of their products.
Gensler did not address any particular ETF implementation but rather restated his broad worries about the lack of regulation and monitoring in the cryptocurrency exchange market. He said that cryptocurrency exchanges provide “a set of contradictory services” to their users, including “trading against their own clients” and “acting as market makers,” both of which are harmful to investors.
In addition, he said that “limited risk monitoring” on cryptocurrency exchanges makes it difficult to spot instances of “wash trading,” a sort of market manipulation that includes the creation of fictitious trade activity or price fluctuations.
He continued by saying that this is why the SEC has repeatedly shot down plans for Bitcoin exchange-traded funds (ETFs), citing worries about the market’s honesty and openness.
Gensler has previously said that he would be more receptive to a bitcoin futures ETF that tracks the price of bitcoin futures contracts sold on authorised exchanges like the CME Group than he would be to an ETF that tracks the spot bitcoin price on unregulated platforms.
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