Custody and price manipulation concerns are the two factors holding back Bitcoin ETFs from being approved in the US, according the chairman of the Securities and Exchange Commission (SEC).
Despite multiple applications from the likes of VanEck and Gemini, there are many in the digital asset community still calling for a Bitcoin ETF, which they believe will benefit the crypto industry.
Speaking at Consensus Invest in New York, the SEC’s Jay Clayton said there are two important issues which need to be solved.
“Investors expect that the trading in that commodity underlying the ETF, is trading that makes sense and is free from the risk of manipulation,” he explained, before adding it’s important “that you have good custody of it, that it’s not going to disappear.”
“The risk in the ETF is truly the risk in the underlying asset, it’s not the risk of theft or disappearance.”
When pressed on the differences between traditional markets and digital assets, Clayton went on to highlight the structure of incumbent exchanges such as Nasdaq which safeguards against many of the issues the cryptocurrency world faces.
“Those stocks are traded on exchanges where there were rules and surveillance,” added Clayton. “Those kinds of safeguards do not exist currently with all the exchange venues where digital currencies trade.”
During his interview on stage at the event Clayton’s repeated message was that the SEC was open to people coming in to the regulator to engage and work with them regarding new digital asset projects.