In an interview with CNBC on Monday, Jay Clayton, the former chairman of the United States Securities and Exchange Commission (SEC), stated that the US regulator should approve the spot Bitcoin exchange-traded fund (ETF) filing if applicants can prove it has the same efficacy as the futures Bitcoin ETF.
Clayton noted that the SEC would find it difficult to resist approving spot Bitcoin applications if they proved it was a more efficient and effective way for investors to gain exposure to crypto assets.
“If they can demonstrate that the spot market has the same efficacy to the futures market, it would be hard to resist approving a (spot)bitcoin ETF,” the former SEC chair said.
Breakthrough?
Clayton was the boss of the SEC when the US regulator started rejecting all spot Bitcoin ETF applications. The former SEC boss stated that although he was skeptical about Bitcoin trading when he was the SEC boss, he now finds the sector quite interesting, seeing that major traditional finance managers are willing to delve into it.
Although the US SEC raised some dust about the chances of the asset manager’s latest applications getting approved by labeling some of the fillings “inadequate” in an early appraisal, applicants like BlackRock and Fidelity have updated their applications.
Following Clayton’s comments, a big boost from BlackRock’s involvement, and the SEC’s recent approval of futures Bitcoin applications, asset managers are now more optimistic that their applications will scale through this time.
The Last Piece in the Puzzle?
The SEC claimed in the early appraisal that applicants needed to be clear on how they would manage a surveillance-sharing agreement, which would abate manipulation and increase transparency. To do that, most applicants reapplied, choosing to use Coinbase as a partner for that purpose.
Clayton, explaining how the SEC handled the futures Bitcoin ETF application, which led to its approval, stated, “When the SEC approved a futures-based ETF, they said, ‘let’s look at the futures market, we see the surveillance, we see the protections in that market for the investor that are sufficient.”
The former SEC boss further noted that they didn’t see that feature in the spot market, which led to the rejection of past applications. With the updated applications containing that final piece, the US’s top regulatory watchdog might not have many options left.
