Is the Launch Date of the Ethereum ETF Approaching Sooner Than Expected Gensler Provides Input
Gary Gensler, the chair of the SEC, stated that the approval of U.S. spot Ether exchange-traded funds (ETFs) hinges on how quickly issuers address feedback from the Securities and Exchange Commission. He emphasized that the SEC is committed to not delaying the approval process intentionally.
Progress has been made, as the commission has approved eight 19b-4 filings for spot Ether ETF listings. However, the launch of trading is pending the necessary approvals of S-1 registration forms. Gensler’s remarks underscore that the speed of these approvals will be determined by how promptly issuers respond to the SEC’s feedback, which is influenced by various factors.
The Legal Challenge by Grayscale
An important factor affecting the SEC’s stance on Ethereum ETFs is the legal challenge brought forth by Grayscale concerning Bitcoin ETFs. Grayscale argued that if Bitcoin futures ETFs are approved by the SEC, then Bitcoin ETFs should not be denied. This legal success has paved the way for a similar approach to be taken with Ethereum ETFs. Gensler highlighted the similarities between BTC and ETH, indicating a regulatory shift towards a more inclusive view on crypto ETFs.
Speculations on Political Influence
While regulatory decisions are primarily based on legal and market considerations, there are beliefs that political influences may also play a role. Bloomberg ETF analyst James Seyffart suggested that SEC Commissioner Jaime Lizárraga’s connections with prominent Democrat Nancy Pelosi could have an impact. Pelosi is a supporter of the Financial Innovation and Technology for the 21st Century Act, which aims to promote crypto innovation. This support may reflect a broader political strategy to align with the increasing crypto-friendly sentiment among voters ahead of the U.S. general elections.
Broader Regulatory Concerns in Crypto
In addition to Ethereum ETFs, Gensler has raised broader concerns about the crypto market. In an interview on June 5, he criticized unethical practices in crypto exchanges, such as trading against customers, which is prohibited in traditional financial markets like the NYSE.
Gensler highlighted the SEC’s ongoing efforts to enforce regulations and enhance market integrity. He also pointed out significant regulatory gaps, particularly in terms of disclosure standards, that leave investors vulnerable. This criticism underscores the necessity of a strong regulatory framework to safeguard investors and ensure fair practices in the rapidly evolving crypto industry.