The regulatory uncertainty regarding cryptocurrencies in the US remains unresolved. Further, the US SEC, one of the country’s regulators, has yet to approve Bitcoin ETFs. In fact, the SEC commissioner, Robert Jackson, recently admitted that the SEC currently has internal disagreements regarding cryptocurrencies, and how to regulate them.
While Jackson never kept his skepticism regarding digital currencies a secret, he stated that the SEC might still approve ETF applications, provided that the crypto industry matures. According to him, if the industry is capable of reaching higher levels of transparency, liquidity, and receives more bigger players, then Bitcoin ETFs might become a reality.
He said as much recently, at the CB Insights’ Future of Fintech conference, pointing out that the market needs to reach this stage, and once it does — he is certain that the SEC will finally be ready to approve Bitcoin ETFs.
The SEC keeps postponing the decision
Many in the crypto industry were looking forward to having the ability to buy Bitcoin (BTC) ETFs. As such, they have followed the US regulator’s struggle with Bitcoin ETF requests in the past few years. The regulator rejected numerous applications already, including the double rejection of a request submitted by the Winklevoss twins, who own and operate crypto exchange known as Gemini.
The first rejection was back in March 2017, and the second one only a year ago — in June 2018. According to the SEC, the twins were unable to show how Bitcoin ETFs could resist and/or prevent market manipulation, fraud, and similar issues.
Then, there was the SolidX and VanEck application, which received the most attention in 2018. After multiple delays, the decision was supposed to be made public in February of this year. However, due to the US government shutdown, the application would have either received approval by default or — the more likely scenario — rejected by the few officials that remained on duty.
To prevent the rejection, VanEck withdrew the proposal, and launched it again after the issues with the government were resolved. And, while the SEC was supposed to bring the new decision in May of this year, they delayed it yet again. Of course, many were encouraged by the fact that it was only a delay and not a rejection, but this still does not confirm that the final decision will be a positive one.
The difference of opinion within the SEC
As for Robert Jackson, he is the only Democrat out of five US SEC commissioners, with the two (Hester Peirce and Elad Roisman) being Republicans, while the Charman Jay Clayton remains Independent. Even so, Jackson, says that the regulator is unlikely to approve the ETF requests, as it wants to protect traders from scams and cons. According to him, the crypto industry has yet to fulfill basic market requirements, despite the fact that Bitcoin trading is as popular as ever.
The ICO scandals in 2017 and 2018 have shown how vulnerable the industry was and still is. He did blame shady law firms for encouraging the ICO sham, claiming that they are not selling securities, which inspired many to participate in them.
As for Jackson himself, he remains a skeptic, but the good news for the crypto community is that the will leave the SEC to teach at the NYU Law School later this year. He currently still acts as the SEC commissioner, despite the fact that his term ended on June 5th. In fact, he is likely to remain on the position until 2020, if the SEC fails to find a replacement.
On the other hand, the Republicans within the SEC appear to be more open to crypto. Hester Peirce, in particular, seems to be Bitcoin-friendly. So much so, that she received the nickname of ‘Crypto Mom.’ However, with so many different stances within the agency, it is hardly surprising that the SEC cannot get to a deal.
Meanwhile, Peirce — an appointee of the US President Donald Trump — remains supportive, even if she was the only one. She was also against the rejection of the Winklevoss application, as she believed that it would slow down innovation in the emerging industry.