Members of VanEck, SolidX and the Cboe BZX Exchange met with U.S. Securities and Exchange Commission staff a week ago to present new arguments on why the regulator should approve a bitcoin (BTC) exchange-traded fund.

The Monday meeting, reported Friday by CoinDesk, took place a few days before SEC chief Jay Clayton threw some water on the ETF idea during the Consensus: Invest conference. “What investors expect is that the trading in that commodity that’s underlying the ETF is trading that makes sense, is free from the risk or significant risk of manipulation,” he told the conference, CNBC reported.

According to the SEC memorandum on the Monday meeting, the three firms met with the SEC’s Division of Corporation Finance, Division of Trading and Markets, Division of Economic and Risk Analysis and Office of General Counsel.

They argued, in effect, that bitcoin is just another commodity, like crude oil, gold or silver, which all have their own ETFs. The bitcoin market, they claim, is mature enough to support an ETF.

As for Clayton’s fear of manipulation, according to the memorandum, the three companies made several arguments to show bitcoin’s price couldn’t be manipulated.

They said the “linkage between the bitcoin markets and the presence of arbitrageurs in those markets means that the manipulation of the price of bitcoin on any single venue would require manipulation of the global bitcoin price in order to be effective.” Another argument: “The potential for manipulation on a trading platform would require overcoming the liquidity supply of such arbitrageurs who are effectively eliminating any cross-market pricing differences.”

The memorandum shows the three companies presented a lot of data and charts to make their case. Now it is up to the SEC to decide what’s next. So far, the industry has struck out with the regulators, but even Clayton, at Consensus: Invest, didn’t rule out a future bitcoin ETF once his concerns are met.

ThirtyK Staff
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