The Securities and Exchange Commission (SEC) has dealt a setback to the plans of companies seeking to launch ETFs (Exchange-Traded Funds) on Ethereum, despite earlier approval of a different type of application. The SEC's chairman, Gary Gensler, recently appeared on Jim Cramer's Mad Money program, where he discussed the ongoing delays in approving ETFs on Ethereum.
Gensler stated that the companies seeking to launch ETFs on Ethereum have not yet received approval from the SEC for their S-1 filing, which is necessary for listing their shares on stock exchanges. While this may seem like a formal procedural issue, similar to the approval of ETFs on Bitcoin, the situation is more complex.
According to Gensler, the reason for the delay is that cryptocurrency firms are engaging in illegal activities that are not sanctioned by New York stock exchanges. He pointed to high-profile cases of fraud and misconduct in the industry, citing the examples of Sam Bankman-Fried, who was sentenced to 25 years in prison for defrauding clients of his failed cryptocurrency exchange FTX, and Changpeng Zhao, who is currently serving a four-month sentence after his company Binance reached a settlement with the US Department of Justice.
Gensler's comments have been met with skepticism by some observers, who believe that his concerns about illegal activities are merely a pretext for delaying the approval of ETFs on Ethereum. The SEC's chairman has a reputation for being critical of the cryptocurrency industry, and his comments have been seen as a further sign of the regulator's reluctance to approve ETFs on Ethereum.
The companies seeking to launch ETFs on Ethereum will need to wait patiently for the SEC's decision, which is likely to take some time.
