The Securities and Exchange Commission has approved the proposals for ether ETFs, which brings them one step closer to their launch.
US Securities regulator has approved the 19b-4 proposals that were submitted by Cboe, NYSE Arca & Nasdaq. “on an accelerated basis,” According to an announcement posted just after 5pm ET on the website of the agency.
These three exchanges are seeking to list ETFs that track spot ether by VanEck and Ark Invest. They also want Fidelity’s, Franklin Templeton’s, Bitwise’s, Grayscale’s, Invesco’s, Fidelity’s, BlackRock’s, Fidelity’s, Fidelity’s, Fidelity’s, Fidelity’s, Fidelity’, Fidelity’s, Fidel This SEC order marks a major step towards the launch of these planned funds.
“After careful review, the commission finds that the proposals are consistent with the Exchange Act and rules and regulations thereunder applicable to a national securities exchange,” SEC’s Thursday order is a statement.
Exchange Act was designed for “prevent fraudulent and manipulative acts and practices” As well as “protect investors and the public interest,” SEC notes
The SEC also has to give its approval to the S-1 filings made by the funds’ issuers before any of the spot ETFs can trade.
“We appreciate the opportunity to engage constructively with regulators as they review spot Ethereum ETFs,” A spokesperson for Grayscale said this in a press release.
Industry observers have observed that the S-1 approval process could be lengthy.
“There will be days (at a minimum), likely at least weeks, and potentially months between approval and launches here,” James Seyffart is a Bloomberg Intelligence analyst. He said this in a blog post published on Tuesday X.
Matthew Sigel of VanEck, the head of research for digital assets, applauded SEC decision on Thursday in blog, noting “we believe the evidence clearly shows that ETH is a decentralized commodity, not a security.”
“We expect this trend will pave the way for more victories via new laws and in the courts, helping to draw investment to Bitcoin, Ethereum, and other open-source blockchain software,” He added.
Winding roads
Movement toward possible ether ETF approval accelerated earlier this week when Seyffart and fellow Bloomberg Intelligence analyst Eric Balchunas upped the 19b-4 approval odds from 25% to 75% — citing increased engagement between the SEC and fund groups.
SEC was given until the 23rd of May to make a decision on a VanEck proposal, while Ark Invest and 21Shares had to wait until the 24th to reach a conclusion. It was assumed that the SEC would either approve or disapprove the entire slate of ether-based ETFs.
Recent political developments, just months away from the election, could have influenced the SEC to change its mind.
The House of Representatives has passed the Financial Innovation and Technology for the 21st Century Act. The same day, Gensler received a request from five Congressmen to have the SEC approve ETFs for spot ether.
Other people have interpreted SEC’s lack of engagement (until a few days ago) with issuers differently.
Grayscale Chief Legal Officer Craig Salm said in a series of March posts on X that the SEC had ironed out many details — related to custody, authorized participants and creation-redemption procedures, for example — in the lead-up to spot bitcoin ETF approvals in January.
21Shares founder Ophelia Snyder stated in a recent interview with Blockworks CEO Jason Yanowitz, that due to overlap between the Bitcoin and Ether ETF proposals there is no need for a 21Shares ETF. “less to look at” SEC.
However, one of the major differences between the ether fund proposal and spot bitcoin ETFs was the issuers’ desire to stake their ETH.
Staking ether involves depositing ETH to help secure the Ethereum blockchain — and earning yield in exchange for doing so.
Stock exchanges and issuers amended their filings in recent days to remove language around staking — a feature of the planned funds that segment observers predicted the SEC would oppose.
In recent days many have increased their odds of the SEC approving ether ETFs, but questions remain about ether’s status as a commodity or security.
Jake Chervinsky is the Chief Legal officer at Variant. He noted that SEC’s approval of ETFs for spot-ether would indicate to him that they do not see ETH without a stake as a financial instrument. “a major policy move.”
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