Earlier this week, SEC Commissioner Robert Jackson spoke to Roll Call about the potential for Bitcoin or crypto-based Exchange Traded Funds (ETFs).
Jackson said he is of the opinion that someone will eventually satisfy the standards the SEC have established. But he also added the caveat that he believes in a mission of saving individual investors from themselves – specifically retail investors:
“Getting the stamp of approval from the deepest and most liquid capital markets in the world is hard, and it should be. Once we put the stamp of the United States Securities and Exchange Commission on an investment, once we make it available to everyday mom and pop investors, we are taking risks that Americans can get hurt,” said Commissioner Jackson.
He explained that he shows up to his job thinking about his parents and protecting them:
“Would I have wanted them to be able to buy that ETF? Hell no. Hell no. And I might not be sitting here if my father had, so, yeah, I take really seriously putting the American stamp of approval on any investment product. I’m not going to do it until those questions get answered.”
Commissioner Jackson commented directly on the Winklevoss ETF application saying it was not a difficult case as it, apparently, fell far short of the Commission’s standards.
“So there you had a situation where the risk for manipulation and for people getting hurt was enormous. The liquidity issues in the market were very serious,” stated Jackson.
In response to the Roll Call article, another Commissioner jumped into the discussionn.
Commissioner Peirce, well known for her acceptance of change an innovation, said investors should decide which investment is right for them – not the government.
I look forward to working with you @SECJackson to open the doors to innovation, but we’re not a merit regulator issuing seals of approval, so let’s encourage investors to do their own work to decide whether an investment is right for them: https://t.co/iMA7NUkLRp
— Hester Peirce (@HesterPeirce) February 7, 2019
There have been many critics of a crypto ETF – as well as supporters. Perhaps the single best argument this publication has heard is the question as to why anyone would invest in a single asset ETF (ie Bitcoin) as opposed to purchasing it directly on a crypto exchange. Yet, it does appear that the Commission is inclined to approve a crypto fund once all of the outstanding questions are answered. Perhaps we will see a diversified product?