U.S. SEC Chairman Jay Clayton Says Crypto Community Answering Key Questions in Push for Critical Validation

In an appearance on CNBC, U.S. Securities and Exchange Chairman Jay Clayton gives a broad update on the Commission’s stance regarding the approval of a Bitcoin exchange-traded fund and whether or not innovators in the cryptocurrency space have been able to satisfy regulators’ concerns about security, manipulation and implementing robust consumer protections.

Satisfaction could prompt the regulator to approve the first fully regulated Bitcoin exchange-traded fund, giving the industry the critical validation.

“The short answer is ‘yes’. But there’s work left to be done. Those were not trivial questions: how do we know that we can custody and have a hold of these crypto assets.

That’s a key question. 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.

Now, progress is being made but people needed to answer those hard questions for us to be comfortable that this [Bitcoin ETF] was the appropriate type of product.”

So far, the Commission has rejected or delayed every Bitcoin ETF proposal that has been submitted. In September and October, the SEC is expected to issue its final decisions on three pending Bitcoin ETFs.

Proposals submitted by Bitwise Asset Management under NYSE Arca and VanEck/SolidX under Cboe BZX Exchange will be decided on October 13 and October 18, respectively.

A “less volatile” ETF, which would hold Bitcoin, short-term US Treasury bills and US dollars, is also pending. A decision on the Bitcoin ETF, submitted by New York-based investment management firm Wilshire Phoenix Funds, is expected by the end of this month.

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