SEC’s Clayton: Changes Needed in Crypto Markets Before Bitcoin ETF Approval

 

 

 

Securities and Exchange Commission Chairman Jay Clayton wants to see some major changes in the cryptocurrency markets before he can be “comfortable” with the idea of approving a Bitcoin ETF, according to a report from CNBC. Speaking at the CoinDesk Consensus invest conference this week, Clayton said that improvements need to be made in areas like market surveillance and cryptocurrency custody.

Clayton noted that the lack of proper market surveillance prevents investors from being able to fairly assess Bitcoin’s price.

“What investors expect is that trading in the commodity that underlies that ETF makes sense and is free from the risk of manipulation. It’s an issue that needs to be addressed before I would be comfortable.”

Unlike the Nasdaq and NYSE, most crypto markets lack effective systems to monitor trading and prevent potential manipulation of prices or other abusive practices.

On the custody front, Clayton expressed concern about the ease with which some digital assets have been stolen:

“We’ve seen some thefts around digital assets that make you scratch your head. We care that the assets underlying that ETF have good custody, and that they’re not going to disappear.”

Clayton’s focus on surveillance and custody suggest that it may be some time before an ETF gets approved, since the industry is still in the early stages of introducing improvements in those areas. While new custody solutions are emerging and a partnership between the Gemini exchange and Nasdaq will provide a testing ground for applying market surveillance technology to the crypto markets, the SEC Chairman clearly wants to see those types of reforms become the norm rather than the exception.

 

 

Author: Ken Chase

Freelance writer whose interests include topics ranging from technology and finance to politics, fitness, and all things canine. Aspiring polymath, semi-professional skeptic, and passionate advocate for the judicious use of the Oxford comma.

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