SEC Chair Clayton: Crypto ETF Needs Exchanges 'Free From Manipulation'

Published on by Coindesk | Published on

Jay Clayton, chairman of the U.S. Securities and Exchange Commission, said Tuesday that he doesn't see a pathway to a cryptocurrency ETF approval until concerns over market manipulation are addressed.

"How that issue gets addressed, I don't have a particular path. But it needs to be addressed" before an ETF gets approved, Clayton remarked during CoinDesk's Consensus: Invest conference.

"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," Clayton said during his appearance, which was moderated by investor Glenn Hutchins.

Clayton also remarked that custody concerns also remain an issue ahead of any kind of ETF approval.

The SEC chairman - who clarified at the outset that he was speaking in a personal capacity, and not on the part of his agency - also honed in on the question of whether the sale of tokens during initial coin offerings constitute securities offerings.

Still, Clayton conceded that in some instances, the status of a particular token isn't as clear-cut.

"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."

Clayton also offered a bit of advice for those looking to pitch tokens to potential investors: "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."

Clayton's remarks fit into the wider picture of the SEC's actions in the crypto space to date, beginning with its July 2017 release of the so-called DAO report, which outlined how some token sales, in the agency's view, could be considered securities offerings.

While some startups sought to bypass securities laws entirely by dubbing their offerings utility tokens, Clayton has noted that the token sale's behavior is how it may be classified.

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