Former SEC Chair says it would be difficult to deny approval of spot Bitcoin ETF if efficacy is demonstrated

  • Former SEC Chair voiced his opinion concerning the current race for spot Bitcoin ETF filings approvals during a CNBC interview.
  • Jay Clayton acknowledges that institutional players ride on the fading distinction between futures and spot BTC ETFs in investor protection.
  • He urges that the key to approval is to demonstrate that spot BTC ETF has similar efficacy to the futures market.

Former Chairperson of the US Securities and Exchange Commission (SEC), Jay Clayton, has given insight that could benefit BlackRock, Valkyrie, WisdomTree, Fidelity, Ark Invest, Invesco, and the rest of the institutional players that have filed for spot Bitcoin Exchange Traded Funds (ETF) approval. The counsel, or evaluation as some would call it, came during an interview with CNBC on July 10.

Also Read: Bitcoin ETFs are not a winner take all, experts say, as influence on crypto exhausts

Former SEC Chair offers insight into spot BTC ETFs filing

Former Chair of the US SEC, Jay Clayton, has made value-adding comments about the current hype in the cryptosphere, spot Bitcoin ETFs.  

In the interview, Clayton dissects what the agency would typically be looking out for, akin to when approving the futures ETF. Based on his assertions, critical considerations include surveillance and market protections for investors, elements that were previously absent in the spot BTC market. In his opinion, this is what gave the futures market an edge over its spot counterpart, hence the early approval.

Nevertheless, Clayton acknowledges that institutional players base their current argument on the fact that the creases, representing the weaknesses of supervision and investor protection formerly identified in the spot market, have been ironed out. Citing him during the interview:

…those distinctions have gone away, and now the spot product is actually less drag, more efficient for the investor.

As such, Clayton counsels that this is the ultimate test that the filings must prove to convince the SEC that approving the spot BTC ETFs would not ultimately harm investors. In his opinion, with all these boxes checked, it would be difficult for the financial regulator to reject the applications.  

A chance for a second go?

Clayton’s assertions come almost two weeks after the SEC discredited the first series of spot Bitcoin ETF filings, citing inadequacy. According to the agency, the applications were “neither clear nor comprehensive,” meaning they did not meet the required standard to assure the agency that the firms had the right infrastructure or systems in place to prevent fraudulent and manipulative practices and therefore protect investors and the interest of the public interest.

With Clayton’s comments, subsequent filings could hit the mark, considering some, like BlackRock and Cboe Global Markets, have already re-filed.

Notwithstanding, the SEC is already enduring criticism from the crypto market for its regulation by enforcement strategy. As it continues to delay what some think is inevitable, they might create even more foes as the campaign for the current chair, Gensler, to step down continues.

Also Read: Larry Fink creates alignment between BlackRock and the purpose of Bitcoin as the race for ETFs continues

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