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Gensler: Crypto Leverage and Lack of Disclosure

Gary Gensler is the chair of the US Securities and Exchange Commission. He says that lack of disclosure and excessive leverage are two of the main factors that hurt the crypto industry. The SEC Chair’s comments on Thursday come at a time when the crypto sector is firmly in the spotlight again. It’s the shocking…


Gary Gensler is the chair of the US Securities and Exchange Commission. He says that lack of disclosure and excessive leverage are two of the main factors that hurt the crypto industry.

The SEC Chair’s comments on Thursday come at a time when the crypto sector is firmly in the spotlight again. It’s the shocking news about what happened to the FTX cryptocurrency exchange.

As CoinJournal reported earlier today, FTX is insolvent and this just added the inreased regulatory attention and overall rage around the crypto community.

Leverage and no disclosure is a ‘toxic mix’

As has been widely reported, FTX’s implosion was down to Alameda Research blowing billions of dollars in trading and leaving FTX with a $8 billion hole. FTX customers possessed the money.

When you mix together a bunch of customer money and borrowing against it, investors get hurt,” Gensler told Andrew Ross Sorkin on CNBC’s ‘Squawk Box’.

He added: “This is a very interconnected world in crypto with a few concentrated players. When markets turned on them it appears that a lot of customers lost money.”

Gensler has previously called on crypto exchanges and other providers to embrace regulation as well as offer more disclosures to better protect investors.

It’s a field that’s significantly non-compliant, but it’s got regulation,” the SEC Chair said, pointing out that crypto investors from all over the world are getting rekt. Consumers are also falling for celebrity promotions and not much disclosure.

This is not like the NYSE or Nasdaq. These platforms mix. They take money from people and then borrow against it. It is a dangerous combination. But not much disclosure, and then they trade against their customers,” “he regulator explained.


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Bitcoin

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Bitcoin

BTC slips amid poor debut for Hong Kong spot ETFs

Bitcoin fell to under $62,000 after spiking past $64,700 earlier as Hong Kong spot Bitcoin and Ethereum ETFs began trading. Data showed trading volumes hit just over $11 million, against expectations of over $3oo million. Bitcoin price fell below $62,000 again amid market reaction to less than encouraging numbers from the first day of trading…


  • Bitcoin fell to under $62,000 after spiking past $64,700 earlier as Hong Kong spot Bitcoin and Ethereum ETFs began trading.
  • Data showed trading volumes hit just over $11 million, against expectations of over $3oo million.

Bitcoin price fell below $62,000 again amid market reaction to less than encouraging numbers from the first day of trading for much hyped spot Bitcoin and Ethereum ETFs in Hong Kong.

BTC was down about 1.4% at the time of writing, having touched lows of $61,587 across major crypto exchanges.

The benchmark cryptocurrency, which has struggled to reclaim key levels since its recent halving event, was seeing a 24-hour trading volume of $28.4 billion.

Bitcoin price and Hong Kong spot ETFs debut

Earlier, Bitcoin price surged to above $64,000 as the six spot Bitcoin and spot Ethereum ETFs went live in Hong Kong.

The flagship cryptocurrency rose to over $64,727 on US-based crypto exchange Coinbase. BTC also soared after reports Hong Kong approved the listing of the ETFs.

NEW: 🇭🇰 Opening ceremony of Hong Kong spot #Bitcoin ETFs 👏 pic.twitter.com/ux1eb5PqRn

— Bitcoin Magazine (@BitcoinMagazine) April 30, 2024

However, as data streamed in showing disappointing trading volumes and inflows, Bitcoin price took a hit. According to details of the six ETFs’s debut day, total trading volume reached just $11 million, not impressive given projections were much higher at over $300 million.

Bitcoin ETFs saw about $8.5 million while Ethereum ETFs recorded just $2.5 million on the first day. Ethereum price fell to $3,040.

Notably, the figures from Hong Kong are way lower compared to those recorded amid the enthusiasm that greeted the launch of spot Bitcoin ETFs in the US in January. On their debut, the US spot BTC ETFs raked in over $4.6 billion in trading volume.

The start to trading for the ETFs has not helped BTC price and BTC could face a slide under the $60k level if sentiment flips negative. On the upside, resistance at $65k remains critical and a breakout could see the bellwether digital asset soar towards its recent peak.


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