SEC Chairman: Roadmap To Crypto ETF Approval Needs Exchanges Devoid of Market Manipulation

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The chairman of the U.S. Securities and Exchange Commission (SEC), Jay Clayton stated on Tuesday that he doesn’t see a roadmap to crypto ETF approval until concerns such as market manipulation are duly addressed.

Speaking during a consensus meeting, Clayton remarked that “How that [manipulation] issue gets addressed, I don’t have a particular path. But it needs to be addressed” before an ETF gets approved.

Making his point clear, Clayton stated that “The prices retail investors are seeing are the prices they should rely on, and free from manipulation – not free from volatility, but free from manipulation.” Not just the issue of market manipulation, Clayton also noted that custody concerns remain a huge issue that must be addressed before we may see any kind of ETF approval.

While making his position on ETF approval very clear, Clayton clarified that he was speaking on a personal capacity and not for the agency which he works for. He also chipped in on the question of whether ICOs constitute security offerings.


“If you finance a venture with a token offering, you should start with the assumption that it is a security,” he added.

The SEC chairman went on to add that in some peculiar cases, the status of some tokens aren’t clear-cut, according to him “some of these questions require a lot of information” without going in full details.

On the flip side, he made it clear that “many are very obvious.”  “I’m selling you my token, I’m going to go off and produce a venture and, hopefully, you’ll get a return for having purchased that token.”

Giving a bit of advice to companies who may be thinking of offering investors token in the future, the SEC chairman remarked that “If there’s a gap between what you’re telling [the SEC] and what you’re telling people investing in your venture, that’s not a good place to start.”

When asked about the recent announcement that two crypto-based agencies who had in the past conducted ICOs settled registration violation charges with the agency and now work with the SEC, the chairman pointed out that those settlements were agreed based on the context of those startups.

Clayton added that “People should understand that this was the remedy in this particular case but remedies in future cases may be different,” he also advised other startups to “Get their act together.”