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SEC Commissioner Kara Stein Offers Suggestions for Bitcoin ETF Applicants

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U.S. attorney Kara Stein, commissioner of the Securities Exchange Commission (SEC), spoke with Bloomberg via satellite on Monday.

They discussed several topics, including the current state of crypto regulation.

Stein’s 5-year tenure is nearly at an end, as she’ll step down in December.  Though her responses about crypto were not entirely specific, they reflected the SEC’s cautious but firm approach to digital currency.  Overall, she wanted to convey that the SEC has investors’ interest at heart, especially under her administration.  In fact, she received praise for her criticism of and action against the SEC for its corporate waivers for dishonest but giant institutions.

Neither is Stein’s fintech division tolerating corruption or fraud

They’ve already nipped several phony ICOs in the bud.  Additionally, they  investigate cases after the fact, providing evidence to help conned investors get their money back.  Meanwhile, crypto CEOs and other leaders are requesting clarification.  Several congressmen recently even drafted a formal letter asking for specific regulation.

The Bloomberg reporters sought some of the same clarity.  One reporter asked Stein about Bitcoin: is it a currency, commodity, or an uncorrelated asset?  Stein replied, accurately, that her  SEC department is only responsible for the determination of whether or not it’s a security.  She added that it depends on “the form or product”..

Instead of making rigid rules at this point, the SEC has more general flag posts in place

Stein describes these in the interview: “valuation, liquidity, custody, and making sure that firms are thinking through how they’re going to deal with all of those issues”.

She goes on to make an analogy to better illustrate this method and compares it to the SEC:

“In many ways it’s like having seat belts, and airbags, and mufflers.  You have to have basic things on your vehicle before you can go into the market”.

Therefore, they do not provide the exact specifications of these parts–the size, the brand, or even the mechanics–so long as they fulfill their proper functions.

Stein’s answers may seem vague, especially when so many are waiting for answers.  But to her credit, she’s simply admitting they don’t have answers yet.  They’re still talking to experts, studying individual cases, and hopefully, working towards the answers in the near future.


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