- SEC Chairman, Jay Clayton has reportedly said that market participants applying for Bitcoin ETFs still do not meet the requirements of the agency
- Clayton says market manipulation and investor protection concerns are delaying the approval of a crypto ETF
- He says the SEC may or may not approve any ETF in the coming months
The Chairman of the United States Securities and Exchange Commission (SEC), Jay Clayton has revealed that the issues of market manipulation and lack of adequate provision for investor protection by several Bitcoin Exchange Traded Fund (ETF) applicants have made the commission reluctant to approve any of the filings, reports Fox Business on March 14, 2019.
Market Manipulation Concerns Stalling ETF Approval
While several crypto enthusiasts, as well as market participants in the U.S crypto industry, wait anxiously for the United States financial watchdog to greenlight the first Bitcoin Exchange Traded Fund (ETF), it appears they may have to wait much longer before they finally get their heart’s desire.
Reportedly, the Chairman of the Securities and Exchange Commission (SEC), Jay Clayton, who gave an interview to FOX Business, has explained that the agency’s rejection of several cryptocurrency ETFs, is not due to a personal bias against bitcoin and other digital assets, but because the market participants have repeatedly failed to meet the standards of the Commission.
The Chairman has made it clear that he is not against distributed ledger technology (DLT) based virtual currencies but rather has concerns over the potential for market manipulation and he’s trying his best to ensure market participants put in place proper measures for investor protection measures before the SEC approves any Bitcoin ETF application.
In his words:
“My primary concern at the moment is if it can be reasonably demonstrated that the underlying trading is generally not manipulated, it’s happening on reliable platforms with robust rules, and that custody is something we can feel comfortable about.”
All Hopes Not Lost
Even with several rejections and postponements, it’s worth noting that market participants including the Chicago Board Options Exchange (CBOE) and SolidX remain determined to make their Bitcoin ETF dream a reality.
As reported by Blockchain Reporter in January 2019, Bitwise filed for a Bitcoin ETF it claims would track the Bitwise Bitcoin Total Return Index.
The SEC is expected to decide on the ETF proposals on its desks shortly, and Clayton has reportedly hinted that there “may be a case where a bitcoin ETF could satisfy our rules.”
He also noted that the underlying technology had shown significant promise in the past and it’s still doing so in the areas “where it’s consistent with our approach to capital raising in the past,” he concluded.