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The SEC denied a host of Bitcoin ETF applications when Jay Claton was in charge. Now he’s assisting One River in trying to get one authorised.
Jay Clayton, the former chairman of the US Securities and Exchange Commission (SEC) who consistently stated that the US market did not need a cryptocurrency exchange-traded fund (ETF), is now assisting a company with its own Bitcoin ETF proposal.
How much of a difference a year can make.
Clayton, who previously stated that the Bitcoin market was susceptible to market abuse and hence did not have an ETF on the US stock exchange, resigned from the SEC last year to become a crypto adviser to blockchain hedge fund One River Asset Management.
And One River today filed an application to the SEC for a carbon-neutral Bitcoin ETF. It is the latest high-profile company to do so (the SEC is currently reviewing eight applications) and the market is, according to analysts, hungry for such a product.
ETFs are common investment vehicles that enable investors to purchase securities that reflect an underlying asset, such as gold or real estate. A Bitcoin ETF enables investors to invest in Bitcoin (or other cryptocurrencies such as Ethereum) without really owning the commodity. Instead, investors purchase shares of the fund, and follow the price of the cryptocurrency.
The US market lacks a Bitcoin ETF since the SEC, under Clayton’s supervision, has rejected any application to date, citing market speculation, a lack of clarity in crypto markets, and a perceived lack of liquidity.
However, Bitcoin and Ethereum ETFs have become a huge hit in Canada, where there are currently eight of them.
According to the submission, One River intends to introduce a carbon-neutral Bitcoin ETF. According to the application, the ETF will include the procurement of carbon credits to reduce the product’s carbon footprint.
“The Trust intends to offset the carbon footprint associated with Bitcoin by purchasing and retiring carbon credits necessary to account for the estimated carbon emissions associated with the bitcoins held by the Trust,” the filing says.
The application from One River arrives at a moment when the controversy about Bitcoin’s energy use is heating up: Tesla CEO and Bitcoin investor Elon Musk last week plunged stocks into freefall when he blasted the currency’s environmental effects.
In its SEC submission, One River seems to be attempting to win over prospective buyers concerned about the coin’s carbon footprint.
And with an insider like Clayton by its side, the firm may have a higher chance of winning than anyone.