Ethereum
Ether ETFs (ETH) clear major hurdle, although SEC has not yet cleared them for trading
Ether Spot (ETH) exchange-traded funds took a giant step toward reality Thursday after the U.S. Securities and Exchange Commission approved major regulatory filings related to them, a significant milestone for the second-largest cryptocurrency.
However, they are not yet allowed to trade. The SEC has given its blessing to so-called 19b-4 forms related to ETFs, but the regulator must approve their S-1 filings before investors can buy them.
This approval follows a surprising turnaround on the part of the markets regulator. After allowing spot Bitcoin ETFs earlier this year, the SEC does not appear to be engaging much with Ether ETF issuers. This has changed in recent days.
“A week ago I would have said you were a little crazy to think these ETFs were going to get SEC approval,” James Seyffart, an ETF analyst at Bloomberg Intelligence, said in an interview ahead of the decision. .
In a statement, a Grayscale spokesperson confirmed that the regulator had approved its 19b-4.
“At Grayscale, we appreciate the opportunity to engage constructively with regulators as they review Ethereum spot ETFs, and we remain optimistic about the potential to bring Ethereum further into the U.S. regulatory perimeter in packaging ETFs,” they said.
Potential issuers of spot ether ETFs include BlackRock, Fidelity, Grayscale, VanEck, Franklin Templeton, Ark/21Shares and Invesco/Galaxy.
While the approval of the 19b-4 filings suggests that regulators are willing to allow issuers to bring an ether spot ETF to market, it does not guarantee that they will ultimately approve the final Form S-1 filings. by all transmitters.
“There will likely be a delay before we can see S-1 approvals and these ETFs start trading. I suspect it will be at least a week, but probably longer. If history is any guide, this could be much longer and be measured in months. But I personally think the gap will be measured in weeks. But everyone is just guessing at the moment.
Regulators sent shockwaves through the industry Monday when reports emerged that issuers had been asked to update their 19b-4 filings before the SEC’s deadline to approve or deny the one of the transmitters, the VanEck depot.
An SEC spokesperson said the agency would not comment beyond what is stated in the order issued Thursday.
In a statement, Andrew Jacobson, chief legal officer of 21Shares, said the approval was “an important step in the right direction.”
Rob Marrocco, global head of ETP listings at Cboe, said the exchange, which plans to list five different cash ETF products, was “excited to expand our offerings” to ETFs. The 19b-4 approval is a step toward these listings.
“The introduction of spot Bitcoin ETFs in January has already demonstrated significant benefits for the digital assets and ETF space, and we believe that spot Ether ETFs will also provide guarantees to US investors, allowing them to gain exposure to Ether in a transparent and well-regulated manner. and an easily accessible structure,” he said.
The exchange will continue to work with the SEC to market the ETFs, he said.
VanEck expects to be the first issuer to launch its spot ether ETF, said Matthew Sigal, the company’s head of digital asset research.
UPDATE (May 23, 2024, 9:30 p.m. UTC): Adds additional information, including SEC filing.
UPDATE (May 23, 2024, 9:50 p.m. UTC): Adds declarations from issuers, Cboe.