SEC Chair Pours Cold Water on Chances of Spot Ethereum ETF Approval

SEC Chair Pours Cold Water on Chances of Spot Ethereum ETF Approval

UTC by Bhushan Akolkar · 3 min read
SEC Chair Pours Cold Water on Chances of Spot Ethereum ETF Approval
Photo: Depositphotos

The SEC chair said that the Bitcoin ETF approval stays limited to one commodity, hinting that the agency isn’t thinking of approving an Ethereum ETF. Also, the agency delayed its decision on BlackRock’s spot Ethereum ETF.

During a media briefing on Wednesday, January 24, SEC Chair Gary Gensler said that the approval of spot Bitcoin ETF earlier this month remains limited to this single cryptocurrency and one shouldn’t interpret it to have any broader implications beyond it. Gensler’s comments come at a time when top financial players including BlackRock and Fidelity have been pushing for a spot Ethereum ETF.

In his briefing yesterday, the SEC chair said:

“As I said two weeks ago, that which we did with regard to bitcoin exchange traded products is cabined to this one commodity non-security and shouldn’t be read to be anything other than that.”

On the other hand, crypto experts remain confident that a spot Ethereum ETF could be coming this year. Previously, some analysts have stated that the approval could come by May 2024.

Additionally, on Wednesday, the US Securities and Exchange Commission delayed the decision for BlackRock’s spot Ethereum ETF proposal, pushing the deadline to March 10. Until then, the regulatory body has time to make a decision. The SEC can either approve, disapprove, or initiate further proceedings on the proposed fund. The filing from the SEC reads:

“The Commission finds it appropriate to designate a longer period within which to take action on the proposed rule change so that it has sufficient time to consider the proposed rule change and the issues raised therein.”

BlackRock submitted the proposal for its spot Ethereum ETF last year in November 2023. Additionally, Fidelity’s application for the spot Ethereum ETF is also facing delays, as filed by the SEC last week.

SEC’s Legal Battles

The US SEC remains embroiled in legal battles with multiple crypto firms including top names like Binance, Coinbase, and Ripple.

In June, the SEC filed a lawsuit against Binance Holdings and its former CEO Changpeng Zhao, alleging deceptive practices towards customers, failure to restrict US investors, channeling funds to investment funds owned by Zhao, and unregistered exchange operations. The SEC also identified 12 tokens, including BNB and BUSD, as securities.

Similarly, Coinbase faced an SEC lawsuit in June, accused of operating as an unregistered exchange, broker, and clearing agency. When questioned about recent court hearings, SEC Chair Gensler deferred to the agency’s enforcement staff and litigators for specific details.

“But stepping back from any one case, I just think that the investing public, if they’re interested in investing in crypto securities, they should be aware and careful that these crypto security tokens are not necessarily giving them the appropriate disclosures and they’re not getting those disclosures from these non-compliant token operators,” said Gensler.

Funds & ETFs, Market News, News
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