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Why does SEC delay Bitcoin ETF approval? Chairman speaks

Amandeep Sonewane | Sep. 10, 2019
Why does SEC delay Bitcoin ETF approval? Chairman speaks

September 10, 2019, | AtoZ Markets - U.S. Securities and Exchange Commission (SEC) has always been concerned about the use of Bitcoin and anything related to the digital asset. This time the market has taken a step forward to address the concerns to gain the approval for a bitcoin ETF (exchange-traded fund).

SEC Chairman's statement on delay in Bitcoin ETF approval

Speaking with one of the media channel on Monday, SEC Chairman Jay Clayton addressed that how the progress can be seen in the crypto space which will allow a bitcoin ETF to launch but still there are concerns regarding this decision.

He further mentioned that people do trades on mostly unregulated exchanges and the biggest concern is that no one is sure on how the prices work and they can be a subject to significant manipulation. The US SEC and people needed answers to such questions and explanation for such concerns to be comfortable with the things.

Clayton’s remarks came just a few weeks before the approval or rejection of a pair of bitcoin ETF proposals will be ruled out by SEC. Bitwise Asset Management is one of the firms that filed a proposal with NYSE Arca. They published several reports over the year to convince SEC that the market is mature enough to support such a product.

Also, Clayton has previously mentioned that the agency was working on making Bitcoin ETF a possibility for investors in the U.S. But still the government is yet concerned for the approval and need for security in regulated markets.

Clayton added: “We’re engaging on this, but there are a couple of things about it that we need to feel comfortable with. The first is custody: custody is a long-standing requirement in our markets, and if you say you have something you really have it.”

Further delay for VanEck/SolidX?

VanEck/SolidX along with Cboe BZX submitted another proposal which was filed in 2018 became a strong competitor for the first bitcoin ETF approved by the SEC. Later on, US SEC postponed the decisions on both ETF proposals, but a deadline of 13th October 2019 has been given for Bitwise and 18th October 2019 for VanEck/SolidX.

Read more: VanEck offers limited Bitcoin ETF for institutional investors

VanEck, however, has begun offering shares of its VanEck SolidX Bitcoin Trust to institutional buyers who are qualified with the help of an exemption under the SEC’s rules.

Disclaimer: The views and opinions expressed in this article are solely those of the author and do not reflect the official policy or position of AtoZ, nor should they be attributed to AtoZMarkets.