Former SEC Chairman on Bitcoin: It would be hard to reject approval of a Bitcoin ETF if the spot market proves its efficiency

Former SEC Chairman Jay Clayton was interviewed by CNBC yesterday, discussing the development of Bitcoin and related ETFs. He mentioned that if it can be demonstrated that investments in the spot market are effective for investors, there is a possibility for the approval of a Bitcoin spot ETF.

Former SEC Chairman Discusses Bitcoin Spot ETF

In an interview with CNBC, Jay Clayton stated that during his tenure as SEC chairman, he held a skeptical view of Bitcoin trading, believing that 90% of the market transactions were wash trades used to manipulate the market.

However, with the development of time, the futures market is now monitored and offers adequate protection to investors, leading to the approval of Bitcoin futures ETF.

But does this mean that a Bitcoin spot ETF should also be approved?

In response, Jay Clayton explained that the reason for distinguishing between the two in the past was due to the lack of protection seen in the spot market. Currently, many institutions argue that these distinctions have disappeared and investing in spot is more efficient for investors.

Jay Clayton did not oppose the views of these institutions, but stated:

"If they can prove the effectiveness of the spot market is similar to the futures market, it will be hard to resist approving a Bitcoin ETF."

Is the Bitcoin Surveillance Sharing Agreement Key?

However, the question circles back to how these institutions can prove they can effectively prevent market manipulation and whether the SEC led by Gary Gensler will agree. This is the key to approval.

Recently, several institutions such as BlackRock, Fidelity, and Ark have resubmitted applications for spot ETFs, all indicating in their applications that they will sign a Bitcoin Surveillance Sharing Agreement with spot trading platform operators, with Coinbase as the surveillance-sharing agreement partner for the spot ETF. The goal is to collaborate and share information on market trading activities, clearing activities, and customer identities to reduce the possibility of market manipulation.

It is reasonable for Coinbase, the largest cryptocurrency exchange in the United States, to be invited as an agreement partner. However, Coinbase was sued by the SEC in early June for violating securities laws and is currently embroiled in litigation.

Whether this surveillance sharing agreement will be the key to the approval of spot ETFs remains to be seen over time.