According to Jackson, it’s not a matter of if it gets approved, but when. The interview has yet to be published, but excerpts were provided by Drew Hinkes, Adjunct Professor at NYU Stern and NYU Law, who shared them via Twitter:
#SEC Commissioner Jackson in an interview to be published next weeks is optimistic that a "fund based on #bitcoin" will eventually be approved, expresses concern about the proposed ETFs submitted to date. pic.twitter.com/3BCuiBd4CB — Drew Hinkes (@propelforward) February 5, 2019
According to the shared excerpts, Jackson said:
“Eventually, do I think someone will satisfy the standards that we’ve laid out there? I hope so, yes, and I think so. Getting the stamp of approval from the deepest and most liquid capital markets in the world is hard, and it should be. Once we make it available to everyday mom and pop investors, we are taking risks that Americans can get hurt.”
A number of bitcoin ETF proposals have filed for SEC approval, but none has yet got the green light.
Jay Clayton, chairman of the SEC has said he doesn’t see a pathway to a cryptocurrency ETF approval until concerns over market manipulation are addressed.
The SEC has to date rejected at least 10 such proposals. Last August, it turned down seven filings from ProShares, Direxion and GraniteShares. A day later, though, the regulator said it would review the proposals. In July, the SEC for the second time rejected Cameron and Tyler Winklevoss’ proposal to list a bitcoin ETF on the Bats BZX Exchange.
Discussing the Winklevoss’ proposal with Roll Call, Jackson said it was “not a difficult case,” but the risk of manipulation and harm to investors was “enormous,” while the market has a “very serious” liquidity problem.
“I’m happy to say market participants have begun to come in with ideas. Whether or not we’re going to find one that really protects investors I don’t know, but I do know that that [Winklevoss] case wasn’t especially close.”
Another SEC commissioner has been even more pragmatic over the possibility of a Bitcoin ETF. Back in July, Hester Peirce said that the Winklevoss’ proposed rule change “satisfies the statutory standard and that we should permit BZX to list and trade this bitcoin-based exchange-traded product (‘ETP’).”
Meanwhile, the quest for an SEC-approved BTC ETF continues in 2019. At the start of the year, there was reported that Bitwise had filed another application after having been rejected by the SEC in 2018. After initially withdrawing the VanEck/SolidX BTC ETF proposal, Cboe refiled the application a few days later.
It appears the CBOE and other institutions are not giving up on a Bitcoin ETF, the Winklevoss twins also stated that they will keep pursuing approval of their COIN Bitcoin ETF, particularly after Gemini become the first to pass SOC-2 examination.
In January, the SEC put out a list of its priorities for 2019, and on the list are cryptos. We already reported that the SEC’s Office of Compliance Inspections and Examinations (OCIE) would head the effort. It will keep an eye out for such things as the ‘offer and sale, trading, and management of digital assets’.