SEC Chairman Clayton Discusses Concerns With Cryptocurrency ETFs

SEC Chairman Jay Clayton Discusses Cryptocurrency ETFs With Fox News

“Clayton shares that the SEC is open to cryptocurrency ETFs that can address potential market manipulation and offer investor’s adequate protection.”

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By Block Society

SEC Chairman Jay Clayton rejected multiple proposals last from Cameron and Tyler Winklevoss, head of the cryptocurrency investment startup Gemini, to establish the first bitcoin ETF. In a recent interview with Fox News, Chairman Clayton clarified that he is not opposed to cryptocurrency assets but is concerned with potential market manipulation.

 

The Winklevoss’ wanted toallow retail investors to trade collections of the cryptocurrency on markets owned by the New York Stock Exchange and others,” but were unable to convince the SEC that proper safeguards were in place for consumers.

 

 

Recently, two companies filed proposals to the SEC involving digital asset ETFs in the hopes of amending current regulations to increase retail investment options. NYSE Arca and Bitwise Asset Management filed proposals to change current rules to allow cryptocurrency assets to be included in ETF options. Chicago Board Option Exchange and SolidX refiled proposals in January after withdrawing them due to the government shutdown. 

In a recent interview with Fox News, Chairman Clayton clarified that he is not opposed to cryptocurrency assets but is concerned with potential market manipulation.”

 

A decision by the SEC is expected in the coming month. The SEC published that it began the review period of NYSE Arca on February 15th and of Chicago Board Option Exchange on February 20th. The SEC has up to 90 days to make a decision on the filings.

 

In August 2018, the SEC received multiple applications involving cryptocurrency ETFs, ultimately rejecting them because they lacked proper consumer and investor protections.

 

 

Chairman Clayton confirmed in a letter dated March 7th, 2019 to Representative Ted Budd that the SEC is committed to its decision that digital assets like Ethereum are not securities, demonstrating that the SEC is remaining consistent in its past decisions. 

 

Cryptocurrency ETFs are likely inevitable, especially if recent proposals can ensure investor protections against possible market manipulations. With traditional banks like JPMorgan Chase and investment firms like Fidelity Mutual implementing cryptocurrency in to their business structure, it’s likely that the SEC will strongly consider the validity of digital asset-based ETFs. 

 

 

Williams, Joe. 14 March 2019. SEC Chairman Clayton on Bitcoin: Buyer Beware. https://www.foxbusiness.com/technology/sec-chairman-clayton-blasts-bitcoin-as-critics-assail-regulatory-stance.

 

 

Rubin, James. 20 February 2019. SEC to Review a Second Bitcoin ETF in Sign of Growing Acceptance. https://www.thestreet.com/investing/cryptocurrency/sec-to-review-second-bitcoin-etf-14872758.

 

Brito, Jerry. 12 March 2019. SEC Chairman Clayton Just Confirmed Commission Staff Analysis That Ethereum and Cryptos Like it are Not Securities. https://coincenter.org/link/sec-chairman-clayton-just-confirmed-commission-staff-analysis-that-ethereum-and-cryptos-like-it-are-not-securities

 

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