The United States Securities and Exchange Commission (SEC) is now more likely to approve an Ethereum spot exchange-traded fund (ETF), marking a significant shift in the cryptocurrency industry. Senior analyst at Bloomberg, Eric Balchunas, has increased the approval odds from 25% to 75%, hinting at potential political influences on the SEC’s decision-making process.
Recent reports suggest that the SEC, which previously maintained a conservative stance on cryptocurrency-related financial products, is now requesting exchanges like the New York Stock Exchange (NYSE) and Nasdaq to update their filings. This move indicates a possible change in regulatory approach and has sparked speculation within the financial community, despite the lack of official confirmation from the SEC.
Nate Geraci, co-founder of the ETF Institute, highlighted that the final decision on the registration requirement for individual funds (S-1s) is still pending. The SEC could approve the exchange rule changes (19b-4s) separately from the fund’s registration (S-1), potentially delaying the process beyond the upcoming deadline for VanEck’s Ethereum spot ETF request.
The complexities of proof-of-stake (PoS) cryptocurrencies add another layer of challenge for the SEC. Alex Thorn, Head of Research at Galaxy, suggested that the SEC might differentiate between Ethereum (ETH) and staked ETH, potentially treating the latter as a security. This approach could align with the SEC’s previous positions and court cases, allowing for the approval of Ethereum ETFs.
Prominent cryptocurrency lawyer Jake Chervinsky noted that the approval of a spot ETH ETF would be a surprise to many closely involved in the process. It could signify a significant shift in US crypto policy, potentially more impactful than the ETF itself, following the SAB 121 vote.
In conclusion, the approval of an Ethereum spot ETF could signify a transformative moment in US cryptocurrency regulation, signaling greater acceptance and integration of digital assets into mainstream financial markets. This decision may reshape US crypto policy and provide cryptocurrencies with a new level of legitimacy.