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United States Securities and Exchange Commission (SEC) chairman Gary Gensler has told senators in a budget hearing that the regulator will give its final approval for the spot Ethereum exchange-traded funds (ETF) sometime this summer.
Ether ETFs To Launch By September
On May 23, the Securities and Exchange Commission greenlighted eight 19b-4 filings to list spot Ether exchange-traded funds on various U.S. exchanges. Still, they can’t begin trading until they have the required S-1 registration statement approvals.
According to SEC’s Gensler, the S-1 registration statements from the applicants will likely be approved this summer, after which the spot ether ETFs can immediately go live in the United States. These ETFs will open the broader markets to regulated and easy–to-trade investment vehicles that give traditional investors exposure to ether without having to hold the asset — similar to the previous establishment of spot Bitcoin exchange-traded funds that hold BTC.
“Individual issuers are still working through the registration process. That’s working smoothly,” Gensler posited in a June 13 hearing of the Senate Banking Committee discussing U.S. President Joe Biden’s 2025 budget requests for the SEC. “I would envision that sometime over the course of this summer, they’ll be [approved].”
Gensler pointed out how Ether futures ETFs had already launched last summer and that CME Ethereum futures had existed for several years.
Notably, the SEC chief is currently under intense scrutiny from critics who think his hostile approach to regulation by overzealous enforcement actions is suppressing the growth of the crypto asset industry in the U.S. — and subsequently driving innovation abroad to more friendly jurisdictions.
During the Thursday hearing, for instance, Tennessee Senator Bill Hagerty (R-TN) questioned Gensler on why his agency hadn’t “fully approved Ether ETFs,” asserting the SEC chair was not prioritizing a “constructive set of rules of the road” for the burgeoning crypto sector.
“Yet other jurisdictions in other countries are setting up rules for their ecosystems. Yet what happens here with the SEC and with the CFTC is constant roadblocks and a lack of certainty,” Sen. Hagerty added. “And what’s happening is that this innovative industry is finding itself increasingly pushed offshore. I don’t think that’s the result that we want to have here in America.”
Gensler Avoids Direct Classification Of Ethereum… Again
Despite his confirmation of the spot Ether ETF approval process, Gensler once again refused to answer whether Ethereum qualifies as a security or commodity when Hagerty directly asked. Legal experts, nonetheless, have argued that the SEC’s approval of spot ETFs effectively deems the second-largest crypto by market cap to be a commodity.
Interestingly, when asked whether ETH is a commodity during the same hearing, Commodity Futures Trading Commission Chair Rostin Behnam responded with a resounding yes.
Perhaps the SEC’s regulatory blessing to spot Ether ETFs brings just the kind of regulatory clarity this industry has been clamoring for. If Ethereum and other similar tokens are not securities, then the SEC has no jurisdiction to regulate these assets under the Securities Act of 1933 and the Securities Exchange Act of 1934. In other words, the SEC may have seriously limited its power to aggressively police the crypto market after approving the spot Ether products.
Crypto attorneys will undoubtedly use the ETF decision to resolutely fight against pending SEC enforcement actions and suits by contending that the securities regulator has overstepped its mandate.