SEC: The lack of market surveillance is an obstacle to Bitcoin ETFs

SEC: The lack of market surveillance is an obstacle to Bitcoin ETFs

The lack investor protection hinders the approval of Bitcoin exchange-traded funds (ETFs) said on Tuesday the Securities and Exchange Commission (SEC) chairman Jay Clayton, cited by Bloomberg.

The main concern for Chairaman Claiton remains the fact that cryptocurrencies can still be too easily stolen or manipulated on the so called crypto exchanges. The remarks were made at the Consensus Invest Conference in Manhattan, New York. He added that the problem has to be resolved before SEC would make any move to allow the first Bitcoin ETFs.

“What investors expect is that trading in the commodity that underlies that ETF makes sense and is free from the risk of manipulation,” Clayton said, adding that such “kinds of safeguards do not exist currently in all of the exchange venues where digital currencies trade… It’s an issue that needs to be addressed before I would be comfortable.”

Stock exchanges like the New York Stock Exchange have surveillance systems, designed to prevent and investigate any abusive and manipulative activity.

In the recent months SEC rejected a couple off applications for Bitcoin-based ETFs on the ground that there is still a significant risk of market manipulation.

ETFs track an index or group of assets, but trade like ordinary stocks.

Crypto activists say that the approval of just one Bitcoin ETF could bring in a wave of institutional investors – a development that will stabilize the Bitcoin price.

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