CBOE Global Markets president Chris Concannon recently sent a letter to the Securities and Exchange Commission (SEC), arguing in favor of regulatory approval for cryptocurrency exchange-traded funds (ETFs). The letter attempted to address concerns raised by the agency earlier this year, when the SEC cited issues of liquidity, investor protections, and the potential for market manipulation as reasons to proceed cautiously with approval of those funds.
In the CBOE letter, Concannon asserted that most of the SEC’s concerns “can be addressed within the existing framework for commodity-related funds related to valuation, liquidity, custody, arbitrage, and manipulation.” He also predicted that the markets would become even more compatible with that framework as they grow and mature:
“As the cryptocurrency markets and infrastructure continue to grow and mature, especially in the spot markets and regulated cryptocurrency derivatives markets, the more easily they will fit within this existing framework.”
Concannon urged the SEC to address the proposed funds “holistically” and in the same way that it has traditionally dealt with commodity exchange-traded products (ETPs), suggesting that such an approach would “allow investors to gain exposure to more mature cryptocurrencies through ETPs without the additional complications and risks of the spot market and help to ensure that American capital markets remain fertile ground for capital formation and financial innovation.”