Securities and Exchange Commission (SEC) has not given a green light to any ETF, applied by various players including Winklevoss twins but SEC’s Chair Jay Clayton has recently talked about the digital currency ETF in an interview with CNBC.
Citing fears of market manipulation, custody security and centralization, Jay Clayton said that he expects the market to have “better surveillance and custody services” before the actual consent to Bitcoin ETF.
It’s an issue that needs to be addressed before I would be comfortable.” Clayton said at the Consensus Invest Conference in Manhattan. “
While speaking to CNBC, he showed great concern towards the interest of investors and said that the crypto market is lack of monitoring tools. It doesn’t have security tools as a stock exchanges are working to prevent abusive and manipulative activity. He doesn’t think investors would be benefited with the fair assessment of the bitcoin’s price.
Addressing the possible issues concerning ETFs, Clayton noted,
“What investors expect is that trading in the commodity that underlies that ETF makes sense and is free from the risk of manipulation,”
However, the delay is no surprise but it would be a discouraging point for crypto enthusiasts who have been waiting for ETF to go mainstream. Speaking at the conference, Clayton mentioned Nasdaq and NYSE where the “surveillance is a great concern”. He said;
The New York Stock Exchange and the Nasdaq have what’s known as “surveillance,” or systems that monitor, prevent and investigate abusive and manipulative activity on the exchanges. “Those kinds of safeguards do not exist currently in all of the exchange venues where digital currencies trade,”
Clayton wants to ensure if the ETF is approved, ts underlying asset must be secured with better custody and with a great deal of surveillance. Interacting to Glenn Hutchins, Silver Lake Partners who was moderating the panel, Clayton noted
“We’ve seen some thefts around digital assets that make you scratch your head,” continuing, “We care that the assets underlying that ETF have good custody, and that they’re not going to disappear.”
In a nutshell, there were two topics that have been highlighted in an overall conversation – a better way to crack down an ICO and to address the security issues before ETF approval. He spoke that the ICO must always be assumed as security. He goes on continuing;
“If you finance a venture with a token offering, “You should start with the assumption that you’re starting with a securities offering,”