ETFs
SEC greenlights Ethereum ETFs – but consumers will have to wait to buy them – DL News
- The SEC ratified a significant set of documents for Ethereum ETFs on Thursday.
- But the products probably won’t be launched for a few weeks or even months.
- The regulator was about to reject the requests, but a change of attitude in Congress changed the situation.
Spot Ethereum exchange traded funds are coming.
The Securities and Exchange Commission on Thursday validated essential documents for the launch of Ethereum ETFs – all but guaranteeing their eventual approval.
“BOOM!! APPROVED! Here it is. The SEC just approved Ethereum spot ETFs,” Bloomberg Intelligence ETF analyst James Seyffart. job. “What a turn of events. This is really happening.
Nine different ETFs – issued by BlackRock, Fidelity Investments, Grayscale Investments, VanEck, Invesco and Galaxy Digital, ARK Invest and 21 Shares, Hashdex, Franklin Templeton and Bitwise – will likely launch.
These are almost the same companies that launched spot Bitcoin ETFs in January, with only Valkyrie missing.
After months of radio silence, the SEC appeared ready to reject the requests as recently as last week.
But following a major attitudinal shift within the Democratic Party leadership, the agency began to communicate frantically with potential ETF issuers on Monday, and even said the exchanges were about whether he was leaning toward endorsing the products.
The reason for this rush? Thursday marks a crucial deadline for VanEck’s candidacy. Exceeding this deadline would be equivalent to rejecting the application.
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But it’s not just VanEck’s problem. Just like with spot Bitcoin ETFs, the SEC likely wants to approve all potential Ethereum ETFs at the same time to avoid giving an advantage to any specific product. Each issuer therefore had to hurry to be ready before the deadline set by VanEck.
And now?
Two essential forms must be finalized for ETFs to be approved by the SEC: 19b-4 filings and S-1 filings.
The SEC approved 19b-4 filings for Ethereum ETFs on Thursday, but because the agency’s change of heart was so unexpected, it will likely take a few more weeks, if not months, to review the S-1 filings .
“The SEC spent nearly four months reviewing and iterating the S-1 Bitcoin spot and five months reviewing the S-1 Bitcoin future,” Scott Johnsson, partner at international law firm Davis Polk & Wardwell, wrote.
“If the Corporation Finance division was actually informed of this potential approval [on Monday]so they are probably just getting started,” he added.
It is unlikely that the SEC will ratify one set of documents and not the other. So, the 19b-4 approvals indicate that the agency will most likely officially greenlight the products in the near future.
In other words, Ethereum ETFs will likely launch this summer.
Seismic change in Washington
The SEC’s about-face this week came shortly after a group of prominent Democrats, including Senate Majority Leader Chuck Schumer of New York, voted with Republicans to repeal a law. controversial crypto accounting rule called SAB 121.
Since then, the Republican-led pro-crypto bill, known as the FIT21 Act. passed with a bipartisan vote of 279 for and 136 against.
The Democratic Party’s sudden friendliness came as a shock to the industry: For a long time, most of its members seemed content to fall behind. Senator Elizabeth Warren, crypto critic of Massachusetts.
The trigger may have been the growing contrast between former President Donald Trump and President Joe Biden.
Trump, historically crypto agnostic, recently said it will support the industry if he is re-elected. Biden, meanwhile, threatened to veto a motion to repeal SAB 121 despite bipartisan support for repeal.
With Trump leading Biden in the polls six months before the presidential election and crypto super PACs raising more than $150 million to advance pro-industry candidates, sometimes in swing states, Democrats’ aversion to the crypto made less and less sense, according to Galaxy. Mike Novogratz, CEO of Digital.
“It’s almost become a purity test – Republicans are good for crypto, Democrats are bad for crypto. And the Democratic regime woke up and said, ‘This is crazy,'” he said. said.
Matt Hougan, chief investment officer of Bitwise Asset Management, said Ethereum ETFs I wouldn’t have had the green light without the help of Wall Street banks.
The success of spot Bitcoin ETFs “made Wall Street realize that there was a lot of money to be made by holding crypto assets,” Hougan said. So they started pushing for the repeal of SAB 121 – and for more crypto assets to be used.
Tom Carreras is markets correspondent for DL News. Do you have a tip on Ethereum ETFs? Contact us at tcarreras@dlnews.com