The head of the Securities and Exchange Commission said Tuesday that concern over a lack of investor protections makes it unlikely that his agency will approve a Bitcoin exchange-traded fund anytime soon.

Chairman Jay Clayton said at a conference in New York that he remains worried that cryptocurrency can be too easily stolen or manipulated on exchanges. Those issues need to be addressed before the SEC lets an ETF move forward, he said in some of his most pointed comments about why the agency has rejected recent applications for the products.

“What investors expect is that the trading in that commodity that’s underlying the ETF is trading that makes sense, is free from the risk or significant risk of manipulation,” said Clayton, who was being interviewed by Silver Lake co-founder Glenn Hutchins. “Those kinds of safeguards don’t exist in many of the markets where digital currencies trade.”

The SEC has turned down a series of bids to list Bitcoin-based ETFs in recent months, dashing the hopes of the backers who see the issuance as a critical step to more widespread investment. Agency staff members have expressed concern about potential manipulation in the largely unregulated market.

The agency has brought several enforcement cases to crack down on the market for initial coin offerings, which Clayton has said is rife with fraud. William Hinman, who heads the SEC’s corporation finance unit, said earlier this month that the agency will issue additional guidance on when securities laws apply to cryptocurrencies and on custody rules for digital coins.


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