The Securities and Exchange Commission (SEC) chairman, Jay Clayton recently, in a conversation with news portal CNBC, revealed what are the pending requirements, before approving a crypto-backed exchange traded fund (ETF).
Clayton stated that US regulators need to comfortable with cryptocurrency-backed custody solution to make sure there is no market manipulation happening, before they consider approving an ETF.
Clayton said, “We’re engaging on this [a crypto ETF], 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.” The SEC chairman further added, “We have sophisticated rules and surveillance to ensure that people are not manipulating the stock market, those cryptocurrency markets by large do not have that; And we’re working hard to see if we can get there, but I’m not just going to flip a switch and say this is just like stocks and bonds, because it’s not.”
The SEC was in the news recently, when it rejected VanEck’s Bitcoin ETF proposal, late last month. As earlier reported by Crypto-News India, a filing by the regulatory body stated that SEC has added a period of 35 more days to gather more information regarding the product. The filing had said, “The Commission is instituting proceedings to allow for additional analysis of the proposed rule change’s consistency with Section 6(b)(5) of the Act, which requires, among other things, that the rules of a national securities exchange be ‘designed to prevent fraudulent and manipulative acts and practices, to promote just and equitable principles of trade,’ and ‘to protect investors and the public interest.'”
While the SEC is taking its time to approve ETFs, it is making headway into regulations, by appointing more crypto-specific positions such as analysts and lawyers.
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