SEC Chairman: Bitcoin ETF Approval Depends Upon Custody Security and Market Protections
- Bitcoin ETF approval will not be happening until certain requirements are met, according to SEC Chairman Jay Clayton.
- The SEC’s “Crypto Mom” commented last week on the need for the SEC to be less involved in crypto regulation.
The Securities and Exchange Commission (SEC) has been incredibly strict about what they will approve with a Bitcoin ETF. While every application has been turned away so far, much of the concern that this authority appears to have is to do with the state of the market. In a recent interview with CNBC, SEC Chairman Jay Clayton commented that cryptocurrency custody and market manipulation need to be properly handled before the regulatory sides with a Bitcoin or other crypto-based ETF.
Speaking on whether an ETF based on multiple cryptocurrencies would end up being launched in the United States, Clayton commented that the SEC is hoping to make that idea into a reality. However, there are still many concerned in the cryptocurrency would that need to be dealt with. The chairman spoke about custody, saying that this type of management is
“a long-standing requirement in our markets.”
As stated above, the other concern has to do with implementing measures that can prevent market manipulation with “sophisticated rules and surveillance.” The cryptocurrency market simply lacks this type of prevention, and the SEC wants the market to “get there,” but refused to say that the situation in the crypto market is anything like stocks and bonds.
Interestingly, no one is asking him to take this stance anyway. The manipulation in the market is something that the stock market already has to deal with anyway. In fact, UBS, Deutsche Bank, and other financial institutions just succumbed to massive fines imposed by CFTC for “spoofing techniques” and manipulation. Still, no matter who brings up these factors in the approval of an ETF, the SEC demands what it demands, and the crypto market is not getting anywhere without it.
SEC Commissioner Hester Peirce, known to the market as “Crypto Mom,” has a much different opinion, who recently urged the authority to take on a less restrictive and cautious approach with an ETF. Yesterday, the SEC even decided to go after the Longfin Corp. cryptocurrency firm and CEO Venkata S. Meenavalli with fraud charges.
In the meantime, the ICE-backed Bakkt exchange for Bitcoin futures stands to soon be launched, which is entirely regulated, according to a filing with the CFTC.