The SEC appears to be on the verge of approving the inaugural Ether futures-linked ETFs, indicating a possible change in its stance on crypto rules. Sources have informed Bloomberg that the U.S. Securities and Exchange Commission (SEC) is approaching the green light for the first Ether futures-based exchange-traded funds (ETFs).
Several companies, such as Volatility Shares, Bitwise, Roundhill, and ProShares, are in the advanced stages, having provided all the necessary paperwork, suggesting they are prepared for ETF operations. Insiders have hinted that approvals could be on the horizon by October. Central to these discussions is Ether, the primary token of the Ethereum platform, which is the second most valuable digital asset after Bitcoin.
The SEC’s Unease with Bitcoin ETFs
The SEC remains wary of ETFs related to Bitcoin. A prime example of this caution is Grayscale Investments’ bid to transform its Bitcoin trust into an ETF, a topic scheduled for a US federal appellate court discussion. The SEC has outlined several concerns for those investing in cryptocurrencies, such as the erratic nature of Bitcoin’s price and worries about potential price manipulation and liquidity issues.
On the other hand, several organizations, BlackRock included, have shown interest in launching Bitcoin-centric ETFs.
Adam Cochran, a crypto community participant, has pointed out the SEC’s potential inconsistency in sanctioning an Ether-focused ETF. He opines that the SEC cannot categorize Ethereum as an unregistered “crypto asset security” while also allowing an ETF based on it. Cochran’s stance is that the SEC, by accepting such an ETF, implicitly views Ethereum as a commodity or currency, rather than a security.
If this viewpoint is accepted, it would be a significant validation, reinforcing Ethereum’s status outside the security classification. Cochran also suggests this could have implications for legal scenarios like the XRP lawsuit, emphasizing a clear demarcation between the asset and its trading.
Though it doesn’t set a firm category for all cryptos, it does demonstrate the SEC’s acknowledgment of a gray area that requires legal clarity.