SEC Says Tighter Regulation Needed Before Bitcoin Can List on Major Exchange

Neil Dennis

Bitcoin must be more tightly regulated before it can be traded on major exchanges the head of the top U.S. market watchdog said on Thursday.

Speaking at the Delivering Alpha conference presented by CNBC and Institutional Investor, Jay Clayton, chairman of the Securities and Exchange Commission (SEC) criticized the lack of transparency around cryptocurrencies and the exchanges they are traded on. He said:

If [investors] think there’s the same rigor around that price discovery as there is on the Nasdaq or New York Stock Exchange they are sorely mistaken. We have to get to a place where we can be confident that trading is better regulated.

Market Capitalization

Bitcoin, with its market capitalization of nearly $178 billion, is the biggest cryptocurrency and, if it were a company, would rank in the world's top 50 by market cap. Yet, while bitcoin derivatives trade on the world's biggest futures exchange - CME Group - the digital token itself remains without a major listing.

While US regulators remain equivocal about how bitcoin and other cryptocurrencies should be regulated, the sector's price volatility and vulnerability to fraud, security breaches and other forms of criminal activity, have ensured the SEC remains suspicious about allowing retail investors greater access to the sector.

Indeed, the SEC continues to block efforts by several financial groups to issue bitcoin exchange-traded funds (ETF). On Tuesday, the CBOE BZX Exchange withdrew its ETF proposal, filed with the SEC in January, to list shares of the VanEck SolidX Bitcoin Trust.

 

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