Jay Clayton — Custody and Market Manipulation Hinders Bitcoin ETF

Wilfred Michael 

Wilfred Michael

News reporter

06 June 2019,
Jay Clayton — Custody and Market Manipulation Hinders Bitcoin ETF

While the wait continues for the first cryptocurrency-related exchange traded fund (ETF) approved by regulators for U.S investors, SEC Chairman, Jay Clayton has revealed what features the crypto market needs to reach that milestone.

In a June 6 interview with CNBC, Jay Clayton answered questions regarding whether it will be possible for his agency to give its approval for a fund offering investors exposure to cryptocurrencies.

In his reply, he affirmed that the SEC was working towards making such an offering possible before going to deliberate on the reasons why we're yet to see one.

Clayton said that the SEC still needs to feel comfortable with some things before giving its approval, especially custody solutions for such digital assets.

"The first is custody: custody is a long-standing requirement in our markets, and if you say you have something you really have it,” he said in the interview.

Next, the SEC Chairman expressed a conviction that unlike the stock market, the underlying market behind cryptocurrencies is still significantly prone to market manipulation.

There are not enough protective measures against such negative influence, was the message passed by Jay Clayton when he said,

"We have sophisticated rules and surveillance to ensure that people are not manipulating the stock market, those cryptocurrency markets by large do not have that, and we’re working hard to see if we can get there."

He, however, did not provide a possible timeline on when the SEC will approve a crypto ETF.

"I’m not just going to flip a switch and say this is just like stocks and bonds because it’s not,” He said, raising doubts that any chance of a Bitcoin ETF or a similar product is not in sight, yet.

Regardless, the U.S SEC still has a couple of Bitcoin ETF applications on its desk with two of those coming from Bitwise Investments and VanEck Investments respectively.


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