Launch Date of Ethereum ETFs Relies on Issuers, Gensler Says

Launch Date of Ethereum ETFs Relies on Issuers, SEC's Gary Gensler States

Key Takeaways

Approval of spot Ether ETFs depends on issuers' responsiveness to SEC feedback, says Chairman Gary Gensler;
The SEC's favorable stance on Ether ETFs was influenced by Grayscale's legal success with Bitcoin ETFs;
Analyst James Seyffart suggests political influences, particularly SEC Commissioner Lizárraga’s ties to Nancy Pelosi, might have affected the SEC's decision on Ether ETFs.

On May 23, the US Securities and Exchange Commission (SEC) gave the green light to eight 19b-4 filings for spot Ether exchange-traded funds (ETFs), allowing various US exchanges to list them. However, trading can only start once these ETFs obtain the required S-1 registration statement approvals.

SEC Chairman Gary Gensler stated that the fate of these ETFs rests on how fast issuers address feedback from the SEC.

Gensler emphasized, "These registrants are self-motivated to respond to the comments they get, but it’s really up to them how quickly they do so," as reported by Reuters on June 6.

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Gensler's previous remarks on CNBC, suggesting that the next steps would "take some time," led to speculation that the SEC might delay the approval process for the S-1 Forms. Bloomberg ETF analyst James Seyffart has previously indicated that this procedure could span weeks or even months.

The SEC shifted towards approving spot Ether ETFs just before the initial decision deadline. Gensler hinted that this change was partly due to Grayscale's successful court challenge regarding Bitcoin ETFs last year.

Grayscale had argued that since Bitcoin futures ETFs were approved, there should be no reason to deny spot Bitcoin ETFs—a logic that has impacted the approval of these ETFs in January. Gensler mentioned that the SEC staff reviewed the Ether filings and observed correlations similar to those found in the Bitcoin market.

Seyffart was surprised by the SEC's approval after months of predicting low chances. Speaking on the Bits+Bips podcast with Unchained, he suggested that SEC Commissioner Jamie Lizárraga, who has ties to Democrat Nancy Pelosi, might have influenced the decision.

Pelosi and several House Democrats have shown support for crypto, as evidenced by the passage of the Financial Innovation and Technology for the 21st Century Act (FIT21) crypto bill on May 22.

Nonetheless, the future of spot Ether ETFs in the US seems to hinge on how swiftly issuers can respond to SEC feedback, potentially paving the way for a shift in crypto investment.