Could this be a hint that the US SEC will give a go-ahead to CBoE, Van Eck and Solid X backed Bitcoin Exchange-traded Fund? Well, there are subtle hints of something deeper going on. With institutional money set to flood and resuscitate a fledgling but emerging asset class, the US SEC will obviously demand accountability and a manipulation free sphere, leveling the field for all investors. And there appears to be steps.
Here’s what Jay Clayton, the chair of the SEC said about the lack of surveillance and outright fraud at the CoinDesk’s Consensus Invest conference and why he’s not ready about Bitcoin ETF:
“It’s an issue (manipulation) that needs to be addressed before I would be comfortable. We’ve seen some thefts around digital assets that make you scratch your head. We care that the assets underlying that ETF has good custody and that they’re not going to disappear.”
On Feb 3, the commission published a solicitation notice urging asking able businesses to provide viewable data of the most common blockchains in a way that “there is no loss in data completeness and accuracy due to the data transformation tools and processes applied.”
In their request, the SEC says potential businesses ought to:
“Provide blockchain data to support the SEC’s efforts to monitor risk, improve compliance, and inform Commission policy with respect to digital assets. The SEC is seeking information for potential sources to support the goal of acquiring data for the most widely used blockchain ledgers, including the universe of available information and transaction details.”
While we can interpret this as steps in the right direction as far as Bitcoin ETF is concerned, the involvement of institutional grade money will involve compromise. These compromises could even go against the tenets of blockchain—that of privacy and freedom. It is true, at one point—especially in the height of the ICO mania of late 2017 and early 2018, honest, law abiding citizens lost their hard earned monies forcing regulators to flex their muscles and penalizing founders s they roll out new guidance on which ICO projects are securities and which are not.
Coincidentally, this solicitation notice comes at a time when the Office of Compliance Inspections and Examinations (OCIE) of the U.S. Securities and Exchange Commission (SEC) have made cryptocurrencies a top agenda in their examination priorities. In a report, the OCIE said it will push on with their mandate, complementing and advising the SEC in their effort to protect the American people.
Identifying cryptocurrencies rapid rise and potential risk to retail investors, it says they “will continue to monitor the offer and sale, trading, and management of digital assets, and where the products are securities, examine for regulatory compliance.”
They go on to say OCIE “will conduct examinations focused on, among other things, portfolio management of digital assets, trading, safety of client funds and assets, pricing of client portfolios, compliance, and internal controls.”
Do you think that this compliance step by the SEC is part of their preparation for a possible Bitcoin ETF approval?