SEC Approves Spot Ethereum ETFs In Landmark Decision

The United States Securities and Exchange Commission (SEC) has approved all spot Ethereum ETFs in a landmark move, paving the way for the products to begin trading later this year. 

The green light to spot Ethereum ETFs comes after intense speculation that the Securities and Exchange Commission was considering treating ETH as a security. 

Spot Ethereum ETFs Get SEC Green Light 

The SEC’s decision marks the approval of the second crypto-based ETF in the United States. It also marks a significant shift in the accessibility of the world’s second-largest cryptocurrency to institutional investors. In a filing on May 23, the Securities and Exchange Commission approved the 19b-4 filings from issuers including BlackRock, VanEck, Fidelity, Franklin Templeton, Grayscale, ARK 21Shares, Bitwise, and Invesco Galaxy. The approval of the rule changes allows the spot Ethereum ETFs to be listed and traded on their respective exchanges. The approval was a surprise for many in the crypto industry, with the expectation that the SEC would reject the filings. Andrew Jacobson, the vice president and head of legal at 21Shares, stated it was an exciting moment for the industry and also called it a significant step towards getting the ETFs trading. 

While the Securities and Exchange Commission has approved the 19b-4s, it still needs to sign off on the S-1 registration statements of the issuers for the spot Ethereum ETFs to begin trading officially. Analysts have speculated this could take anywhere between days, weeks, or even months. The SEC had instructed applicants to accelerate their 19b-4 filings on May 20, with the removal of staking being the most notable amendment across filings. While there is no time frame for S-1 registration statement approvals, sources have hinted that issuers are ready to launch, but the SEC’s corporate finance division may request changes in the coming days and weeks. 

SEC’s U-Turn On Spot Ethereum ETFs 

While the markets were skeptical about approval, the winds began shifting when Bloomberg increased the approval odds from 25% to 75%. Following this increase, the market began anticipating that spot Ethereum ETFs may get the SEC’s nod. Rob Marrocco, the global head of ETP listings at Cboe Global Markets, stated, 

“The introduction of spot bitcoin ETFs has already demonstrated significant benefits for the digital assets and ETF space, and we believe that spot ether ETFs will similarly provide safeguards for US investors.”

The SEC had steadfastly rejected spot Bitcoin ETFs for over a decade, citing concerns about market manipulation. However, it was forced to approve them after Grayscale won a court case last year. The CEO of CF Benchmarks, Sui Chung, stated that Ether is far more complex than Bitcoin, and it could take the SEC months to review the statements. However, he added that since spot Bitcoin ETFs already gave an established template, “there’s only so much slow rolling the SEC could do.”

House Of Representatives Votes In Favor Of FIT21 

The Securities and Exchange Commission’s approval comes only a day after the United States House of Representatives voted in favor of a bill that would provide greater regulatory clarity to the crypto industry. The Financial Innovation and Technology for the 21st Century Act demarcates the roles of the SEC and the Commodity Futures Trading Commission, but it needs Senate approval and must be signed into law. 

The SEC’s decision significantly boosts the cryptocurrency industry’s efforts to enter mainstream finance. Earlier this week, the UK regulator also approved listed crypto products.

Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

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