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Jay Clayton, chairman of the U.S. Securities and Exchange Commission (SEC), would like to see the cryptocurrency markets adopting similar tools overseeing the trade of traditional instruments, before being “comfortable” with allowing exchange-traded funds (ETFs) based on cryptocurrency price movements.

CNBC reported that Clayton, speaking at the Consensus Invest Conference in Manhattan, pointed to several aspects of the cryptocurrency industry he wanted improved. Among these was a monitoring of prices to ensure the absence of manipulation, similar to surveillance mechanisms for stock exchanges.

“Those kinds of safeguards do not exist currently in all of the exchange venues where digital currencies trade,” Clayton said.

Last April, Nasdaq announced that the Winklevoss-owned Gemini exchange would be using the stock exchange company’s SMARTS market surveillance technology for its BTC futures contracts traded on Cboe’s futures exchange. Even this did not prevent the SEC from denying Gemini’s application for an ETF based on BTC futures, last July.

Clayton also said that custody for cryptocurrencies has not been sufficiently developed, with numerous high-profile thefts reported often. “We’ve seen some thefts around digital assets that make you scratch your head… We care that the assets underlying that ETF have good custody, and that they’re not going to disappear,” he said.

Currently, several companies offer custody services, with regulatory approval, such as BitGo. However, Clayton maintained that services “need to be improved and hardened.”

During the conference, Clayton also affirmed the SEC’s position on initial coin offerings (ICOs), whose tokens the agency classifies as securities under its control. He addressed companies holding ICOs to “start with the assumption that you’re starting with a securities offering.”

The commission regularly publicizes its issuing of cease-and-desist orders to companies that fail to register with it. It has also recently positioned itself against developers of smart contracts, on the assumption that they are providing a trading facility.

The SEC has not decided on the ETF application of VanEck Solidx, which it had said it would do by September 30. It has likewise refrained from a final ruling on other applications.

The lone dissenter to the commission’s rejecting of Gemini’s application, Commissioner Hester Peirce, has remained outspoken on the need for the SEC to step aside and allow for the innovation of financial products, subject to the same regulations as other investments. At the Crypto Valley summit in Zug, Switzerland, she delivered a video speech stating that she was “working on convincing my colleagues” to favor an approach allowing well-informed investors to choose whether or not to buy a cryptocurrency-based product.

She also noted how the Commodity Futures Trading Commission has been open to cryptocurrency derivatives, and that the SEC itself was holding various events regarding digital asset technologies, which made her “hopeful.”

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