By Bitcoin ETF may finally obtain the Securities and Exchange Commission’s approval giving the green light to the several proposals that have faced rejection.
In an interview on September 9, SEC chairperson, Jay Clayton spoke to CNBC’s Bob Pisani in a CNBC exclusive. Clayton indicated that there is progress coming along the concept of Bitcoin ETF front. Listening to the interview, the U.S. Securities and Exchange Commission (SEC) seems to embrace the approval of Bitcoin ETF.
A yes to Bitcoin ETF
While concerns are still hovering around the idea of Bitcoin EFT service, more reasons are arising to approve the service. During the interview, Clayton answered “Yes” after CNBC’s interviewer Bob Pisani asked whether the crypto community is closer to witnessing Bitcoin ETF. In his answer, he said,
“The short answer is yes. But, there’s — 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. And 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 was the appropriate type of product.”
As indicated, the SEC chairperson was reluctant about approving Bitcoin or any other cryptocurrency ETF. SEC indicated that until concerns over market manipulation are secured, he did not see the need for this service. As such, SEC had turned down several such proposals including ProShare and GraniteShares prior to this interview.
The rejection was as a result of an increase in the risk of manipulation of prices, especially with unregulated exchanges causing harm to investors alongside a great concern over liquidity. In addition, there is the concern of a lack of proper crypto custody. During the discussions, Clayton acknowledged that Bitcoin businesses are getting closer to addressing the concerns that closed their approval window.
Testing the Waters
The possible positive outcome comes just a few weeks before the deadline for Bitwise and VanEck/SolidX, two ETF proposals. The deadline for the two approvals is October 13TH and October 18TH, respectively.
According to SEC’s Rule 144A, companies do not need to register with SEC when only qualified institutional buyers such as brokers and hedge funds are involved.
As such, the VanEck Securities and SolidX Management are looking to launch a limited version of Bitcoin ETF with or without SEC’s approval without breaking any rules. This product is set to target institutional investors.
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