VanEck advisor Gabor Gurbacs expressed concerns on March 27 over the incompetence of modern-day crypto regulations and their negative effects on innovations.

His criticism stemmed from the instability in the crypto industry as it relates to the regulatory framework in light of the US Securities and Exchange Commission (SEC) postponement of potential approval of VanEck’s spot Ethereum ETF application.

VanEck Advisor Asserts Regulations Prioritizes Political & Personal Interests

Gurbacs shared his dissatisfaction in an X post, as he highlighted the extent of the limitation of innovations and the negative economic outlook caused by ineffective regulatory frameworks by relevant authorities.

I am personally unhappy with how regulators in developed markets managed the first decade of digital asset regulation. They manage to simultaneously enable scammers, hamper actual innovation and protect incumbents on the expense of those building better systems.

— Gabor Gurbacs (@gaborgurbacs) March 27, 2024

The shared concern by the VanEck advisor came shortly after the SEC announced the delay in VanEck’s spot Ether ETF application on March 20.

The United States Securities and Exchange Commission (SEC) recently announced the postponement of a potential decision regarding an application for a spot Ethereum exchange-traded fund (ETF) submitted by asset manager VanEck. This delay was outlined in a notice issued on March…

— Brian Leonel Padilla (@Brian_OjosLocos) March 22, 2024

Gurbacs also drew attention to the rise of scammers in the blockchain sector, which has become a hotbed for fraud.

His observation aligns with Chainalysis 2024 crypto crime report data, which disclosed that illicit crypto addresses received $24.2 billion in 2023.

Additionally, the advisor noted that while there are a few exceptions to his criticism, regulators must provide and implement new structures to build tomorrow’s markets.

There are of course a few exceptions to this. I am grateful to have worked with a number of bright regulators over the past decade on matters that seemed impossible then but now it’s a reality. Still the fact is a fact: lots more work to do to build the markets of tomorrow.

— Gabor Gurbacs (@gaborgurbacs) March 27, 2024

“It’s not excusable or tolerable to prioritize personal/political interests and senseless bureaucracy over national interests and capital formation,” he said. “Not ever but particularly not in the economic condition where the world is now.”

It’s not excusable or tolerable to prioritize personal/political interests and senseless bureaucracy over national interests and capital formation. Not ever but particularly not in the economic condition where the world is now.

— Gabor Gurbacs (@gaborgurbacs) March 27, 2024

Meanwhile, two events corroborating Gubarcs’ concerns include the DoJ indictment against the KuCoin exchange and the SEC settlement with Binance.

Federal prosecutors in Manhattan had on March 26 charged KuCoin and two of its founders, Chun Gan and Ke Tang, over an alleged violation of the US anti-money laundering (AML) laws and for operating an unlicensed money transmitting business.

GET OFF OF @kucoincom

PROMINENT GLOBAL CRYPTOCURRENCY EXCHANGE KUCOIN AND TWO OF ITS FOUNDERS CRIMINALLY CHARGED WITH BANK SECRECY ACT AND UNLICENSED MONEY TRANSMISSION OFFENSES: DOJ

— RenderM₳mi Top #7 (@RENDERMAMI) March 26, 2024

Some analysts and market players believe the fresh lawsuit will probably result in a huge settlement as it did for Binance.

It could be recalled that the SEC had charged Binance for multiple offenses like fraud, AML violation, sales of unregistered assets, and more in 2023 before the exchange was slammed with a federal resolution charge of $4 billion. However, it should be noted that Binance is not the crypto exchange in the eye of the storm of the SEC – Coinbase was sued a day after Binance.

While Federal charge settlements seem to be a fair penalty for large firms, the VanEck advisor believes that the existing crypto regulations are biased.

VanEck Joins Others in Waitlist for SEC’s Greenlight

SEC’s delayed announcement of VanEck’s spot Ether ETF proposal puts the asset manager on a waitlist that includes Grayscale, Fidelity, BlackRock, Ark 21 shares, Hashdex Nasdaq Ethereum ETF, and the Invesco Galaxy Ethereum ETF.

Experts believe these postponements indicate a trend of caution by the SEC in approving crypto-based ETFs.

[PN] SEC DELAYS HASHDEX ETHEREUM ETF

NOTICE OF DESIGNATION OF A LONGER PERIOD FOR COMMISSION ACTION ON PROCEEDINGS TO DETERMINE WHETHER TO APPROVE OR DISAPPROVE A PROPOSED RULE CHANGE TO LIST AND TRADE SHARES OF THE HASHDEX NASDAQ ETHEREUM ETF UNDER NASDAQ RULE 5711(I) (TRU

— Phoenix » PhoenixNews.io (@PhoenixTrades_) March 19, 2024

The speculation surrounding the decision on a spot Ethereum ETF has been a topic of contention. Recent optimism about crypto ETFs has diminished, however, with Bloomberg ETF analyst Eric Balchunas revising his prior forecasts of the possibility of approval by May 23 to become uncertain.

Ether ETFs Probably Won’t Be Approved in May
Although the SEC approved spot Bitcoin ETFs in January, approval of an Ether-backed product in May seems unlikely.

Bloomberg ETF analyst James Seyffart thinks regulators will reject spot ETH ETFs on May 23.

“My cautiously optimistic…

— secondbuy (@secondbuy_de) March 20, 2024

Meanwhile, a local news report suggested that the US regulatory agency plans to classify ETH as a security and has issued subpoenas to three companies to investigate the Ethereum Foundation, the entity behind the Ethereum blockchain network.

ETHEREUM FOUNDATION SUBPOENAED FOR THE FIRST TIME IN ITS HISTORY; ETF REJECTION INEVITABLE?

NFA; read below for my analysis and opinion

The Facts
– The foundation has removed the Warrant Canary from its website, indicating in a Github repository that they have been… pic.twitter.com/gVUQ8j1GKL

— huss (@Husslin_) March 20, 2024

While the SEC had previously approved 11 Bitcoin ETFs earlier this year, Ethereum ETFs may encounter regulatory obstacles.

Regardless, VanEck and other participants wait patiently for the Ethereum ETF green light, similar to Bitcoin ETFs, which has an impressive record of $57B in on-chain holdings, representing 4.17% of the current BTC supply.

The post VanEck Advisor Gabor Gurbacs Concerned Over the Impact of Stringent Crypto Regulations on Innovation appeared first on Cryptonews.