SEC’s Gary Gensler says it could take time for spot ether ETFs to begin trading: CNBC Crypto World

SEC’s Gary Gensler says it could take time for spot ether ETFs to begin trading: CNBC Crypto World

today Bitcoin bounces back above $71,000 SEC chair Gary Gensler tells CNBC what made the agency approve a rule change to open the door for spot ether ETFs and coinbase’s chief policy officer explains what made the crypto exchange pour another $25 million into a digital asset super [Music] pack welcome to cnbc’s crypto world I’m Talia Kaplan it’s another day of gains for Bitcoin as the cryptocurrency crossed back above $71,000 by noon Eastern ether is also in the green although moving up just one tenth of a perc salana Rose today too gaining 4% okay let’s talk about the top stories SEC chair Gary Gensler joined CNBC Squawk on the street this morning from the floor of the New York Stock Exchange where he discussed what prompted the SEC to approve a rule change late last month that would PVE the way for spot ether ETFs we have in the US already a way that you can invest in very ious uh underlying Securities and underlying Commodities called exchange traded products in January we approved an exchange traded product on bitcoin um and about a week and a half ago similar filings to list on the New York Stock Exchange list on NASDAQ and the like exchange traded products on ethereum ethereum had been traded on the Chicago meranti Exchange futures for three plus years and the staff looked at that closely and that was approved now the underlying exchange Tred products still need to go through a process to have the disclosure about that and that will take some time but they’re working on that now genser also discussed crypto markets more broadly this morning saying that tokens have not offered investors the disclosures that are needed and required by law we the SEC tomorrow are turning 90 happy birthday SEC 90 and what president Rosevelt did is he created this commission to oversee that you the investors get disclosure and in the crypto markets they aren’t giving you that disclosure and secondly that exchanges like like here this floor the New York Stock Exchange get properly regulated to protect against fraud and manipulation and they don’t trade against you and these crypto exchanges Jim are doing things we would never allow this New York Stock Exchange to do our laws don’t allow you to trade against your customers and so you’ve seen the bankruptcies in this space and there are there are some of the most leading lights in this field are either in jail about to go to jail or waiting extradition next FTX has reached an agreement to settle $24 billion in claims from the IRS in a court filing submitted on Monday the bankrupt crypto exchange proposed a two $200 million payment to the agency as a Priority Tax Claim then another $685 million payment that would come after the exchange pays back customers and creditors lawyers for FTX said the agreement eliminates a significant litigation risk and provides certainty for creditor and customer recoveries FTX proposed a plan back in May that would allow most customers to get all their money back the plan says that those with claims of $50,000 or less that’s about 98% of its customers will get 118% of their claim amount as for the settlement with the IRS the bankruptcy court still has to approve the plan all right focusing on crypto regulation for our main story I spoke with farar shirzad Chief policy officer at coinbase about recent developments in the US and the crypto exchange’s latest multi-million dollar contribution to a digital asset super pack on Monday coinbase announced it was pouring another $25 million into crypto Super PAC Fair Shake last week blockchain firm Ripple and web 3 focused crypto Venture firm a16z also pumped another $25 million each into the pack in a blog post CEO Brian Armstrong noted that coinbase’s latest contribution brought the total Fair shake and its Affiliates have raised to $160 million in this election cycle making it one of the largest super packs what does that signal to you and what are you hoping is achieved in Washington with this money well tell you you know there are 50 2 million Americans who bought crypto and their voice has largely been ignored in Washington for years now and so we at coinbase and a number of other peer institutions decided to get together and try to get the community to finally have a voice so part of that has been funding fairshake the Super PAC um and the other part of it which we’re very excited about is funding the creation of an independent organization called Stan with crypto which is a Grassroots organization which today very shortly should hit 1 million Advocate signed up uh uh to advocate for good crypto policy and good for pro crypto candidates and so it’s a big Landmark day today we’re very excited about it now we have seen some major regulatory advancements from Congress in recent weeks in fact last month 71 Democrats joined 208 Republicans in voting yes for the financial Innovation and technology for the 24 Century act uh crypto Market structure Bill what do you make of that development and what do you think will happen with this legis well it underscored something we’ve known all along which is uh crypto is not a partisan issue I think Democrats and Republicans when they evaluate what needs to be done from a policy perspective generally seem to come on board uh in particular when we bring constituents out to meet with members we had of the 71 Democrats who voted for the legislation I think 33 of them we had uh uh constituents from their districts where crypto Founders and innovators can meet with them and every one of them voted for the bill so I think CP moments arrived I think the merits of crypto being built in the US have always been kind of unable and obvious and now the politics are catching up to the merits and we get a huge result uh in that house uh and very excited to see what happens in the Senate now the Biden Administration publicly said that it opposes the passage of the fit for the 21st century act but signaled the president will sign the bill if Congress passes it now we’re seeing crypto getting more focused this cycle in fact last month the Trump campaign announced it will start accepting crypto donations and Trump isn’t the first presidential candidate to accept crypto donations Robert F Kennedy Jr who was mounting a Longshot independent bid announced last year that his campaign would accept Bitcoin contributions now according to a Harris poll in partnership with grayscale American voters increasingly want to support a political candidate who is knowledgeable about crypto so what do you think is behind the political shift we’re seeing play out here well there’s been a lot of polling on this young people are largely disaffected with the financial system as it exists now I think most Americans are but it particularly strong among Young Americans and uh when you have a group a subset like that particularly it’s particularly important for electoral purposes really be unhappy with the system and recognize that crypto provides an alternative it becomes quite powerful U you have a generation of Americans who’ve grown up in a d digital native fashion they’re accustomed to transacting socializing learning uh engaging online in digital form crypto is the technology that allows you to not only pass uh and trade information but also to trade items of value in tokenized form and so I think young people get it I think older people are beginning to get it and I think that generational shift is going to shift politics dramatically we’re seeing a lot of that happen right now now turning to another recent development the SEC approved a rule change about 2 weeks ago that would pave the way for spot ether ETFs I heard you call the development an important step towards regulatory Clarity and mainstream adoption of ethereum were you surprised by the sec’s approval of a rule change and what else does this move signify especially as it pertains to the SEC which many believe has taken an aggressive stance against the crypto industry in the past well on the merits it wasn’t a surp at all the the you know the denial sec’s denial of a Bitcoin ETF uh ultimately had to go to the courts the court said that the decision to deny that one was uh arbitrary capricious and an abuse of of power um the merits of the E ETF were identical to the Bitcoin ETF and so there’s really really no legal basis for them to deny it so to the extent we were surprised there’s a degree to which this SEC is trying to sew chaos in the industry and so there was a risk that they would try to do the same by just denying this and have the courts force their hands but they ultimately decided to to do the right thing uh approve the ETF and it’s a big unlock for people who want to access crypto through traditional brokerages to be able to do that um our view is very much uh the rising tide lifts all boats crypto adoption is good for uh the American people but it’s good for our business and we feel very excited about it now many of the potential ether ETF issuers Choice coinbase as their custodian according to JMP Securities coinbase could see benefits to its transaction custody and staking businesses from these ETFs what would you say this development means for coinbase specifically well crypto is a broad uh web 3 and and crypto platform so we’re obviously in exchange but we’re also a custodian we pride Prime brokerage services so there’s a range of different ways we interact with the ETF F what we found with the Bitcoin one is that the market volume and Market activity increased on our exchange even as the ETFs came online so there was a complimentary Synergy between those two things um I’m hopeful that we’ll have something like that happen uh once the ETF uh e ETFs actually come online but it also brings a whole new slew of Americans into the crypto economy they begin to get accustomed to and learn about how you can move digital um token of value uh seamlessly in uh almost without any cost and the potential for that to tokenize a broad range of other activities is enormous you’ve got countries like Brazil who are engaged in National strategies to try to tokenize their economies broadly and all of that starts with a single step and we’re taking a lot of really important steps here in the US to take us down that road and we’re we’re pleased to play a big role in that okay that’s all for crypto world today we’ll be back again tomorrow and we’ll see you then [Music]

CNBC Crypto World features the latest news and daily trading updates from the digital currency markets and provides viewers with a look at what’s ahead with high-profile interviews, explainers, and unique stories from the ever-changing crypto industry. On today’s show, Faryar Shirzad, chief policy officer at Coinbase, discusses the company’s latest donation to digital asset-focused super PAC Fairshake.

Chapters:
00:00 – CNBC Crypto World, June 5, 2024
0:28 – Bitcoin continues climb
0:42 – The headlines
3:52 – Coinbase’s Faryar Shirzad

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SEC’s Gary Gensler says it could take time for spot ether ETFs to begin trading: CNBC Crypto World