The US Securities and Exchange Commission (SEC) has asked companies to update Form 19b-4 in applications to launch a spot Ethereum ETF. This is reported by CoinDesk with reference to sources.
I also wrote about the regulator’s requirement to amend the documents in an “expedited manner” The Wall Street Journal.
However, the SEC's action does not mean that spot ETH-ETFs will necessarily be approved in May. Prospective issuers must approve Form S-1 before launching the instrument.
According to insiders, one of the issuing companies said it may be on the right track to obtain approval, unlike the situation a few weeks ago when there was no dialogue with the SEC.
Bloomberg stock analysts Eric Balchunas and James Seyffarth raised their odds of approval for a spot Ethereum ETF from 25% to 75% following news that the SEC could take a more favorable stance on the product.
Update: @JSeyff and I are increasing our odds of spot Ether ETF approval to 75% (up from 25%), hearing chatter this afternoon that SEC could be doing a 180 on this (increasingly political issue), so now everyone scrambling (like us everyone else assumed they'd be denied). See… https://t.co/gcxgYHz3om
— Eric Balchunas (@EricBalchunas) May 20, 2024
The department is now conducting an investigation to determine whether ether is a security.
Galaxy Research researcher Alex Thorne noted that the SEC may try to find a “middle ground” by dividing Ethereum into two types – non-security and locked in staking, which fits the definition.
if the speculation about a 180 from SEC on the ethereum ETFs is true, i would guess they try to thread a needle between “ETH” NOT being a security and “staked ETH” (or even more flimsily, “staking as a service ETH” ) as BEING a security.
that would be somewhat congruent with…
— Alex Thorn (@intangiblecoins) May 21, 2024
According to CLO Variant Fund Jake Czerwinski, the approval of Ethereum funds “will be a shock to people close to the process in Washington.”
Dragonfly Managing Partner Haseeb Qureshi convincedthat President Joe Biden intends to soften his attitude towards cryptocurrencies before the elections in order not to lose votes.
Against the backdrop of news about the resumption of dialogue between issuers and the SEC, the price of Ethereum jumped to $3,655 – by 20% per day.
Earlier, Coinbase exchange analyst David Khan called the approval of Ethereum-ETF a matter of time. According to the specialist, the rationale used to approve the Bitcoin ETF also applies to an instrument based on the second largest cryptocurrency by capitalization.
Lawyer Scott Johnsson said the SEC is studying the basis for denying applications for spot Ethereum ETFs. One of them may be assigning the status of a security to an asset.
Source: Cryptocurrency
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