U.S Securities and Exchange Commission (SEC) Chairman Gary Gensler issued a warning to cryptocurrency exchanges, stating that providing disclosures to investors does not shield them from regulatory enforcement.

Gensler emphasized in a CNBC interview Wednesday that disclosures alone are inadequate if crypto exchanges engage in activities such as market manipulation or disseminate misleading information that affects investment decisions.

He also pointed out that many crypto companies fail to provide any disclosures, operating in a manner that would be unacceptable in conventional financial markets.

The SEC has ramped up its enforcement actions in the digital assets space, particularly after the collapse of cryptocurrency exchange FTX in late 2022.

The agency is actively involved in litigation against some of the largest players in the U.S. crypto market, including a case against Coinbase, the largest exchange by daily trading volume in the United States.

Gensler showed a more nuanced approach when discussing the potential for crypto ETFs, such as those involving the Solana memecoin BONK.

This softer tone aligns with the SEC’s recent approval of spot Ethereum ETFs, a decision that was unexpected by many due to previous considerations of Ethereum as an unregistered security.

The SEC’s approval of Ethereum ETFs has sparked discussions about the agency’s willingness to consider other altcoin spot ETFs.

Political dynamics, including the influence of the crypto lobby and the approaching 2024 election, are thought to have influenced the SEC’s evolving stance.