No, the SEC did not just say it’s approving a Bitcoin ETF

By Guillermo Jimenez

Is the SEC about to approve a Bitcoin ETF? Cryptoland has been going absolutely bananas at the thought that the SEC might be slyly dropping hints that it’s getting ready to do just that.

The latest “clue” comes in the form of a few hopelessly hopeful words spoken by an SEC commissioner to a CQ Roll Call reporter… in the future?

Drew Hinkes, an Adjunct Professor at NYU Law and legendary Crypto Law Twitter attorney, was first to spot the news, dropping an excerpt of the interview dated February 11 on his Twitter timeline. Hinkes, obviously a cybernetic organism sent from the future to convince us to HODL, spurred a flurry of hastily written articles across the crypto web from “journalists” claiming a “leaked interview” had confirmed a Bitcoin ETF is nigh at hand.

Well, it turns out that while these gumshoes have been piecing together evidence of the SEC’s bitcoin intentions based on Hinke’s screencaps, the article has been available in full on the CQ Roll Call website the entire time—the date on the screencap simply a mistake. So what did Commissioner Robert J. Jackson Jr. say during the interview that has bitcoin bulls worked up into such a lather? What does he have to say about whether a Bitcoin ETF proposal can actually pass muster and meet the SEC’s criteria for approval?

“Eventually, do I think someone will satisfy the standards that we’ve laid out there? I hope so, yes, and I think so.” End quote.

“Eventually.” As in, at some undetermined point in the geological future and maybe not even within our own lifetimes, “eventually.” Good god, are we desperate for good news.

Those of us who actually read the interview can tell you that—excluding the words “eventually” and “I think so”—virtually every other breath Jackson expended on the topic of a Bitcoin ETF was a condemnation of every single proposal issued to date. In fact, Jackson told Roll Call that rejecting the last Bitcoin ETF proposal was an easy call. And since absolutely nothing has changed to make cryptocurrency exchanges any less prone to manipulation, there is zero reason to think the SEC has come any closer to changing its mind.

“I take really seriously putting the American stamp of approval on any investment product,” Jackson told Roll Call. “I’m not going to do it until those questions get answered.” End of story.

Indeed, the best thing to come out of this interview was probably the response from fellow SEC commissioner, Hester “Crypto Mom” Peirce, reminding Jackson that issuing “stamps of approval” is not really the SEC’s job:

No, a much more promising development—yet still not the bombshell that eager beaver bitcoiners made it out to be—came in the form of a “solicitation notice” from the SEC issued last week. The SEC’s “Sources Sought Announcement” calls for blockchain businesses to provide the Commission with data that could help its efforts to “monitor risk, improve compliance, and inform Commission policy with respect to digital assets.”

There is nothing in the notice that explicitly references the ETF or any other specific piece of policy, but sure, its review of crypto-related investment products could very well be one of the procedures that the SEC is looking to better inform. If nothing else, by asking for help from the blockchain community to supply applicable data, the SEC is demonstrating that it is sincere when it says it wants to better educate itself on crypto and move away from a policy of “regulation by enforcement.”

It is mildly curious, however, that the solicitation notice was issued on the same day that the most recent proposal for a bitcoin-backed exchange-traded fund was resubmitted. The VanEck/SolidX/CBOE super team had previously voluntarily withdrawn its proposal during the government shutdown only to refile it at the end of January.

But all this really means is that the countdown for the SEC to render its decision has been reset—a ruling, no longer due by the end of February, will in all likelihood not be made until late fall 2019.

The SEC has proven it likes to take its time. It has no incentive to make a decision on a Bitcoin ETF before it absolutely must. Of course, that won’t stop the cryptoverse from endlessly speculating otherwise. As you were, detectives.

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