coincodex.com
Key highlights:
- Former CFTC chairman Timothy Massad says the SEC could leverage the Bitcoin ETF approval process to improve transparency in the crypto industry
- The SEC has so far been reluctant to approve a Bitcoin ETF, citing market manipulation concerns
Former CFTC chairman Timothy Massad outlines the potential positives of Bitcoin ETF
Timothy Massad, who headed the U.S. Commodity Futures Trading Commission (CFTC) between 2014 and 2017, says a Bitcoin ETF could be used to improve transparency in the cryptocurrency industry.
The decision of whether to allow a Bitcoin ETF to be traded in the U.S. markets is up to the country’s securities regulator, the Securities Exchange Commission (SEC). Despite many applications from asset management firms, the SEC so far hasn’t approved a single proposed Bitcoin ETF. Some examples of companies that have submitted Bitcoin ETF applications to the SEC are VanEck, WisdomTree, SkyBridge Capital and 21Shares (in partnership with Ark Invest).
The SEC has cited market manipulation concerns in the cryptocurrency market as the most important hurdle that is making them reluctant to allow a Bitcoin ETF to trade in the public U.S. markets. The majority of Bitcoin trading volume is happening on exchanges that aren’t regulated in the U.S.
Sharing his thoughts in a recent op-ed published by Bloomberg Opinion, Massad argues that the SEC could leverage the Bitcoin ETF approval process to improve the transparency in the cryptocurrency exchange industry:
“The SEC could use the ETF approval process to improve transparency and integrity of trading on crypto exchanges. The approval would be granted on the condition that the ETF price be based on an index of exchanges meeting certain prescribed standards, similar to those for securities and derivatives exchanges.”
Massad says that the SEC could create positive incentives for exchanges by requiring improved reporting and disclosure standards, anti-fraud protections and improved risk management as a prerequisite for exchanges that would be included in a Bitcoin ETF’s index.
Massad added that the current SEC chairman Gary Gensler could use his previous experience at the helm of the CFTC – during Gensler’s tenure, the CFTC fined Barclays for attempting to manipulate the Libor and Euribor indices.
For now, the SEC is still pushing back its decisions on different Bitcoin ETF applications. In a July 7 notice, the SEC revealed that it pushed back its decision on whether to approve a Bitcoin ETF proposed by SkyBridge Capital to August 25.