SEC Chairman Does Not Rule Out Tokenised ETF

The U.S. Securities and Exchange Commission (SEC) is prepared to consider the possibility of creating a tokenised exchange-traded fund (ETF), said SEC Chairman Jay Clayton.

During a panel discussion ‘Innovations and Regulation of Digital Assets’, organised earlier this week by the Палатой цифровой торговли, Clayton said there was a high likelihood that shares would be tokenised.

“We would like to try this. Our doors are open. If you want to show how to tokenise an ETF product to improve its efficiency, we would like to meet with you,” said the head of the SEC.

In the past, the Commission has repeatedly rejected applications for Bitcoin-based ETFs. The most recent active application, proposed by Wilshire Phoenix, was rejected by the SEC in February 2020.

Also, initiatives in the field of tokenised products were curtailed. In July 2020, the SEC and the Commodity Futures Trading Commission (CFTC) fined the company behind the Abra platform, Plutus Financial, a total of $300,000. Between December 2017 and October 2019, American and foreign clients of Abra unlawfully entered into over-the-counter swaps on digital assets and foreign currencies.

Jay Clayton also noted that the SEC’s interest in innovation does not mean that those engaging in unscrupulous activity will be able to take advantage of it. He reminded that in the past the Commission charged several ICO startups that claimed they were developing payment tools and, for that reason, should not have to register.

“We do not like it when people talk about a payments system, although in fact it is a financial instrument,” added Clayton.

Earlier this week the SEC ordered the Salt Lending cryptocurrency-lending platform to begin returning to investors more than $47 million raised in a 2017 ICO.

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