Former SEC chair does not see a Bitcoin Spot ETF rejection

Jay Clayton, former chairman of the Securities and Exchange Commission has said that he cannot see any further rejections of the current Bitcoin Spot ETF submissions.

Inevitable

Once the chairman of the SEC, serving his term from May 2017 to December 2020, Jay Clayton has said publicly that approval of a Bitcoin Spot ETF is “inevitable”. 

Talking on CNBC Squawk Box last week, Clayton was asked if he was back in the chair (of the SEC) would he pass the current raft of Bitcoin spot ETFs? Clayton refused to be drawn but did say that “it is clear that Bitcoin is not a security”, and said that retail and institutional investors want access to it.

The now independent Director of Apollo Global Management, and also Senior Policy Advisor and Counsel for Sullivan & Cromwell LLP, also stated:

“Importantly, some of our most trusted providers, who are fiduciaries or have duties of best interest, want to provide this product to the retail public”

Cash vs futures ETF

He went on to say that “the dichotomy between a futures product and a cash product can’t go on forever”, obviously referring to how Gensler’s SEC had tried and failed to make a clear case for the difference between a futures and a spot ETF, which a judge had recently called “capricious and arbitrary” when deciding in favour of Grayscale vs the SEC.

When asked if he thought that investors might be safer buying a Bitcoin futures ETF rather than a Bitcoin cash ETF, Clayton gave his initial view from the time when he was chairman of the SEC:

“I held the view that we were uncertain whether cash creating was so easily manipulable that retail folks should not have access to it.”

However, he followed this up with his current assessment:

“There are large institutions with surveillance mechanisms who are coming and saying ‘that is not the case, we can rely on the efficacy of the cash market to a sufficient extent where we believe that this is an appropriate product’”. 

Clayton finished by saying that there was now a 45-day deferment on the decision, which he believed, in the grand scheme of things, was a short time, and that in his view there would be progress on the decision going forward.