The US Securities and Exchange Commission (SEC) has officially approved the spot Ethereum exchange-traded fund (ETF) and granted 19B-4 form approvals for eight applications. The next step is for the SEC to approve the S-1 forms, which will allow these ETFs to be traded on stock markets. While this approval may not happen immediately, investors are pleased that the crucial initial step has been completed.
Previously, the SEC expressed concerns about whether Ether should be classified as a security. This was outlined in the Wells Notices sent to crypto companies. However, the SEC has now backtracked and granted initial approvals to all eight applications, likely due to political reasons. The approvals for the S-1 forms are expected to come in a few weeks.
Here are some important points to note:
– After careful review, the Commission determined that the Proposals align with the Exchange Act and the rules for a national securities exchange.
– The approval designates the ETF as Commodity-Based Trust Shares, officially categorizing it as a commodity.
– The Commission accepted a 99% correlation between CME and spot ETH pricing.
– Each Proposal includes consistent elements found in other ETPs approved by the Commission, such as availability of pricing information, transparency of portfolio assets, and oversight procedures.
During the review process, one commenter argued that the Commission should approve the Proposals because CME ether futures ETFs, which are registered under the 1940 Investment Company Act, already trade on national securities exchanges and have a higher potential for underlying asset manipulation. Another commenter stated that there is no difference between the approval of spot bitcoin ETPs and spot ether ETPs at this stage.
The SEC provided an explanation for granting approval, which was signed by J. Matthew DeLesDernier, marking a historical milestone.
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Disclaimer: This article does not constitute investment advice. Investors should be aware that cryptocurrencies are highly volatile and carry inherent risks. It is recommended to conduct thorough research before making any investment decisions. You can follow us on Telegram, Facebook, Twitter, and Coinmarketcap for more updates.
