The Securities and Exchange Commission (SEC) Chair Gary Gensler has announced that the regulator is expected to approve spot Ethereum ETF applications’ S-1 registration forms over the course of this summer. This final step will allow the ETFs to launch in the US by the end of summer, well before the November presidential elections. The approval of S-1 registration forms from individual issuers is currently pending, but Gensler assured during a Senate hearing that the registration process is proceeding smoothly.
Industry experts have predicted that the approval of the S-1 documents could take anywhere from weeks to months following the 19b-4 approvals. It is believed that the spot Ethereum ETFs will begin trading before the November elections. Despite the pending S-1 approval, the introduction of spot Ethereum ETFs in the US is considered inevitable. Many in the industry, including legal experts, already classify Ethereum as a commodity, following the SEC’s approval of Ethereum as a single-asset ETF product.
During the Senate hearing, Gensler did not clarify whether Ethereum is classified as a security or commodity, stating that the agency had only “partially” approved Ethereum ETFs. However, CFTC Chair Rostin Behnam made it clear that Ethereum is a commodity and should be supervised by his agency. Gensler also addressed concerns over the SEC’s fiscal year 2025 budget request, highlighting the agency’s limited resources in contrast to the significant growth and changes in the markets.
Gensler expressed concern over a stipulation in the agency’s fiscal year 2025 funding bill by the House Appropriations Committee, which restricts funds from being used for enforcement actions related to digital asset transactions, except for fraud or market manipulation. He emphasized the SEC’s critical role in maintaining market integrity and protecting investors, stating that the agency is the “cop on the beat watching out for the investing public and issuers.” Gensler stressed the importance of adequate funding to keep pace with the rapidly evolving markets and technological advancements.
Overall, the approval of spot Ethereum ETF applications’ S-1 registration forms is expected to happen over the course of this summer, with the ETFs launching in the US by the end of summer. The introduction of spot Ethereum ETFs in the US is seen as inevitable, with Ethereum already widely considered a commodity in the industry. Gensler’s comments during the Senate hearing address concerns over the agency’s limited resources and the need for adequate funding to maintain market integrity and protect investors. The SEC’s role in overseeing digital asset transactions and enforcing regulations remains crucial in the rapidly evolving financial landscape.
