The United States Senators Jack Reed and Laphonza Butler are urging Securities and Exchange Commission (SEC) Chairman Gary Gensler to halt approval for more crypto exchange-traded funds (ETFs), citing risks for retail investors.
They claim allowing such approvals by the SEC would expose investors to fraud and manipulation in thinly traded crypto markets. They specifically mention concerns about proposed Ether ETFs and fear of setting a precedent based on recent Bitcoin ETF approvals.
Reed and Butler also want stricter scrutiny on Bitcoin ETF brokers and advisors. This move follows their involvement in bills targeting cryptocurrency regulation, including anti-money laundering measures.
Analysts suggest mounting political pressure could delay an Ether ETF approval, with odds dropping from 70% in January to 35% in March. Both senators have previously supported bills to tighten regulations on cryptocurrencies and decentralized finance.
The push by Senators Reed and Butler to halt crypto ETF approvals reflects growing concerns about potential risks to retail investors and the need for stricter regulatory oversight in the cryptocurrency market.
Also Read: SEC Charges 17 Individuals in $300M CryptoFX Ponzi Scheme
