The market has taken steps to address the U.S. Securities and Exchange Commission’s (SEC) concerns about approving a bitcoin exchange-traded fund (ETF), but there is still “work left to be done,” said the agency’s head.

Speaking on CNBC Monday, SEC Chairman Jay Clayton said “progress is being made” in the crypto space to allow a bitcoin ETF to launch, though concerns linger.

In November the chairman said concerns around price manipulation were a key holdup for the financial product’s green light, alongside questions such as how custody operates.

On Monday, Clayton reiterated these concerns, saying:

“An even harder question given that they trade on largely unregulated exchanges is how can we be sure that those prices aren’t subject to significant manipulation? … People needed to answer these hard questions for us to be comfortable that this was the appropriate kind of product.”

The SEC’s questions are “not trivial,” Clayton added.

Critical juncture

Clayton’s remarks come just weeks before the SEC is expected to approve or reject a pair of bitcoin ETF proposals.

Bitwise Asset Management, which filed one of the proposals with NYSE Arca, has published a number of reports over the past year in an effort to convince the SEC that the market is mature enough to support such a product.

VanEck/SolidX submitted the other proposal with Cboe BZX. This proposal was filed in 2018 and was seen as a strong contender to become the first bitcoin ETF approved by the SEC. However, it was withdrawn during the prolonged government shutdown of early 2019 and re-filed.

The SEC has postponed decisions on both ETF proposals but faces a final deadline of Oct. 13 for Bitwise and Oct. 18 for VanEck/SolidX.

While waiting for an ETF approval, VanEck has begun offering shares of its VanEck SolidX Bitcoin Trust to qualified institutional buyers using an exemption under the SEC’s rules.

Though the product, announced last week, is not a retail offering (and therefore not an ETF), the shares come from the same trust on which VanEck hopes to build an ETF.

Nikhilesh De contributed reporting.

Jay Clayton image via CoinDesk archives