SEC Chairman Jay Clayton: “Work left” on Bitcoin (BTC) ETF
Another preview of fund applications is coming up this fall, but the US Securities and Exchange Commission remains skeptical.
The creation of a Bitcoin (BTC) exchange-traded fund is still going through its initial efforts, and there is “work left to be done”, according to US Securities and Exchange Commission chairman Jay Clayton. Speaking for CNBC, Clayton stated that progress has been made, but there are also concerns.
The chief hurdle is the notorious volatility of BTC trading, and the potential for price manipulation. In the past year, BTC has appreciated rapidly, often adding thousands within a day, or dropping just as fast, suggesting concerted efforts to move the price.
“An even harder question given that they trade on largely unregulated exchanges is how can we be sure that those prices aren’t subject to significant manipulation? … People needed to answer these hard questions for us to be comfortable that this was the appropriate kind of product,” said Clayton.
The statement comes up just days after the Van Eck fund launched a limited investment vehicle for large-scale clients, though not fully an ETF.
The US SEC has been generally skeptical of ETF based on hot current trends, and has actively banned terms like “blockchain” and “5G” from the names of funds. An ETF can have any size, and offer exposure to almost any asset to the wider public, thus creating danger for personal finance based on hype.
The BTC markets have generally ignored the expectations of an ETF, as new factors are affecting the price. Still, the mid-October reassessments of the Van Eck and Bitwise funds may add clarity to the potential for mainstream acceptance of BTC.
The US SEC has been a significant force in the formation of the current crypto asset market. The Commission has scrutinized various aspects of the crypto space, essentially wrecking the ICO bonanza in the USA, and creating pressures for US-based crypto trading. The constant reassessment of newly minted tokens and coins for their potential to work as unregistered securities has made crypto startups much warier.
The actions of the SEC also caused US-based exchanges Bittrex and Poloniex to delist multiple assets, and for most exchanges to limit the access for US traders. The leading exchange, Binance, plans to open a US-based, fully compliant branch.