The lone Democratic commissioner on the SEC predicts that a fund based on cryptocurrencies will eventually get the green light in a new interview with Roll Call.
The obsession with Bitcoin ETFs are gone out with all but a whimper. What were elated expectations in 2018 have been met with relative disappointment. After multiple ETFs were rejected in 2018, and many so indefinitely pending for 2019, can we expect a crypto-based ETF to ever get through the SEC?
The SEC has been more focused on cleaning up the crypto space as of late, closing down multiple unlicensed broker-dealers and other ICOs which they consider illegal. ETFs, it seems, just don’t meet the necessary requirements yet, and they’re not on the top of the SEC agenda as of now.
However, now Robert J. Jackson Jr., a commissioner for the SEC, has publicly said that crypto-based ETFs certainly seem to be on the horizon. “Eventually, do I think someone will satisfy the standards that we’ve laid out there? I hope so, yes, and I think so,” Jackson told Roll Call in an exclusive interview.
Meeting ETF Requirements
The main impediment now seems to be volatility and the ability to manipulate prices which everyone in the crypto community is obviously privy to. An ETF fund would trade as securities, which would need to meet the requirements for more ordinary funds.
However, although there have been many high-profile rejections of ETFs by the SEC as of late, Jackson says there this does not mean no progress is being made. In fact, the recent denials have encouraged others to come forward to the SEC on how to specifically meet these standards, according to Jackson. And that’s a very positive development.
“Getting the stamp of approval from the deepest and most liquid capital markets in the world is hard, and it should be,” Jackson said. “Once we put the stamp of the United States Securities and Exchange Commission on an investment, once we make it available to everyday mom and pop investors, we are taking risks that Americans can get hurt.”
Jackson says that the SEC’s strict regulations are for good reason. “I come to this job thinking about my mom and dad,” he said. “Would I have wanted them to be able to buy that ETF? Hell no. Hell no.”
ETFs would technically fall under the jurisdiction of securities which raises a whole host of new questions. Although much of the crypto space is still coming around to recognizing tokens are securities, a growing portion of the space is actively pushing for tokenized securities as the new standard.
Do you expect an ETF to be approved in 2019? Are you optimistic at all? Let us know your thoughts in the comments.
Image courtesy of SEC.