Speaking to Bitcoin.com, an FSA representative said:
There is no such fact that we are considering approving ETFs which track crypto-assets at present. We are not currently considering approving them.
Last week, several sources including Bloomberg reported that Japan is exploring the possibility of approving Bitcoin ETFs as an alternative to Bitcoin futures.
The reports led to an increase in anticipation toward the approval of the VanEck Bitcoin ETF filing that is set to be decided by the U.S. Securities and Exchange Commission (SEC) by the end of February, as the emergence of strictly regulated investment vehicles in a major market like Japan would decrease the risk of price manipulation.
However, in a statement, an FSA spokesperson said that the agency does not recognize the necessity of any cryptocurrency-related derivatives as of now, solidifying its stance against both crypto ETFs and futures products.
“Taken it into consideration that it is difficult for us to find constructive and social significance of trading crypto-assets derivatives at present, we think that there is no need for trading crypto-assets derivatives at financial instruments exchanges where many market participants are able to trade,” the representative explained.
Previously, Jake Chervinsky, a government enforcement defense and securities litigation attorney at Kobre & Kim, said that while the launch of an ETF in overseas markets could address what the SEC considers as a key issue in manipulation, it is likely to have a minimal impact on the decision of the SEC.
A Bitcoin ETF in Japan or any other major cryptocurrency market was never going to have any effect on the decision of the U.S. SEC, as the commission prefers to operate as the leader in international regulation.
But, it demonstrates the willingness of the FSA and the Japanese financial authorities to focus on strengthening the infrastructure of the local cryptocurrency exchange market rather than shifting to investment vehicles that could provide the asset class with mainstream exposure in a short period of time.
Throughout the past several months, ten ETFs have been rejected by the U.S. SEC for various reasons including manipulation and security risks.
Since then, companies in the likes of VanEck and Bitwise have filed ETF proposals that address most of the issues the SEC laid out publicly in the past.
Bitwise, for instance, a cryptocurrency hedge fund which filed an ETF proposal this week, has built an index to track the price of Bitcoin on exchanges, futures markets, and over-the-counter (OTC) trading platforms in an attempt to find an accurate price of the dominant cryptocurrency based on maximum daily volume.
Regardless of the progress made in overseas markets, the U.S. SEC will likely continue to identify areas of improvement following the rejection of every ETF filing, which would eventually increase the probability of a Bitcoin ETF in the long run.
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