SEC Chairman Reiterates Investor Protection Before Bitcoin ETF


The crypto market still waits for when the United States Securities and Exchanges Commission (SEC) finally moves to approve the first bitcoin exchange-traded fund (ETF).

While some commissioners within the agency have noted the approval will eventually happen, the SEC Chairman, Jay Clayton, still maintains that concerns about investor protection need to be fully addressed before the commission gives a nod to any bitcoin ETF.

The securities regulator has held this view from the beginning, and the SEC chairman expressed his sentiments about the same in an interview published on March 14.

Speaking to FOX Business, Clayton sought to clarify that he wasn’t out to oppose growth within the digital currencies sector, noting that he remained neutral.

However, he stated that his main concern has always been the potential for market manipulation within the crypto industry. He added that SEC’s main goal is to see greater protection accorded to the investor via market structures that guarantees the same.

Clayton noted that his concern lay in the fact that the market needs to “reasonably” demonstrate that trading in the underlying assets isn’t manipulated. He explained the concern comes from the fact that “reliable venues with good rules” have been found culpable of manipulation before.

Another aspect of the market he needs to see improve is the custody of digital assets so that it becomes “something [the commission] can feel comfortable about.”

Clayton does not specifically refer to any of the ETF proposals before the commission, suggesting that any one of them could get regulatory approval if it satisfied the set rules.

Though not categorical about imminent approval, the SEC chief’s comments are somewhat positive, not entirely good news, but something all the same.

He went on to state that “[crypto] technology has and is already demonstrating pretty significant promise,” alluding to the fact that more needs to be done.

The crypto industry has had several developments in relation to custody and consumer protection, but Clayton believes most of it needs to be consistent with the SEC’s guidelines.

Meanwhile, the U.S. securities regulator is set to commence the countdown towards the eventual approval or disapproval of the CBOE proposal for the VanEck/SolidX Bitcoin ETF.

The CBOE withdrew the application in January following the U.S. government shutdown. The exchange re-submitted the ETF proposal in early February.

On February 15, the commission published the NYSE Arca rule change proposal that seeks approval for a Bitwise bitcoin ETF. With that, the agency began a review of the application and will approve or disapprove it within 45 days. However, the law allows it to extend the period by a further 90 days.

The SEC Chairman’s latest remarks about bitcoin ETFs come in a week where he also commented about Ethereum, confirming his earlier statement that Ethereum (ETH) was not a security token under U.S. law.

He, however, noted that a digital asset’s designation as a security token is likely to change with time. Overall, his remarks have been well received within the crypto space.

Disclaimer: This is not investment advice. Cryptocurrencies are highly volatile assets and are very risky investments. Do your research and consult an investment professional before investing. Never invest more than you can afford to lose. Never borrow money to invest in cryptocurrencies.

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