More Time and an Upgrade is Required for Bitcoin ETFs
Cryptocurrency investors have been eagerly waiting for Bitcoin ETFs over the year, which they believe would play a significant role in attracting the massive cash inflow from big investors.
The SEC has declined several applications regarding Bitcoin ETFs in the last 12 months; the SEC rejected applications due to price manipulation activities, flaws in crypto exchanges, and lack of regulatory control.
Investors, however, were hoping that the SEC could approve ETFs in the first quarter of next year, as several applicants including the Winklevoss twins brothers are planning to submit new applications that they believe fulfill all SEC requirements.
Jay Clayton Wants More Regularities Before Approving ETFs
The Securities and Exchange Commission Chairman Jay Clayton wants the crypto market to work on several fronts before getting approval for ETFs.
During the CoinDesk’s Consensus conference, Clayton again raised several questions over the cryptocurrency markets. He wants more security and surveillance of crypto exchanges. The disagreement among the crypto exchanges over trading and security tools has been exposing investors to several risks.
He said, “What investors expect is that trading in the commodity that underlies that ETF makes sense and is free from the risk of manipulation. It’s an issue that needs to be addressed before I would be comfortable.”
The SEC Chairman wants cryptocurrency exchanges to use surveillance technologies that the NYSE and other stock markets have been using over the years.
The Chairman also showed concerns over the custody of crypto assets. He says, “We’ve seen some thefts around digital assets that make you scratch your head. We care that the assets underlying that ETF has good custody and that they’re not going to disappear.”
Previously the investors had experienced several hacks and thefts in cryptocurrency exchanges, which resulted in a loss of almost $1.3 billion to investors and exchanges according to market reports.
The cryptocurrency market is immature, and cryptocurrency exchanges are mostly unregulated – which makes it difficult to get approval from SEC for BTC ETF’s. The market players, however, are working on different fronts to comply with SEC requirements. NYSE has recently announced to collaborate with crypto exchanges in integrating their surveillance technology. The entrance of Goldman Sachs and Fidelity in crypto markets as custodian and trading platform would also help in fulfilling SEC requirements.
What’s your opinion about SEC chairman’s stance about Bitcoin ETFs? Express your opinion in the comments section below.