As a seasoned crypto investor with a keen interest in the regulatory landscape, I find the recent approval of spot Ethereum ETFs by the SEC intriguing. While the approval was handled differently than that of spot Bitcoin ETFs, which were cleared via a vote from the five-member committee including SEC chief Gary Gensler, the delegated authority used for Ethereum ETFs is not uncommon.
On May 23, the SEC gave its green light to Ether spot exchange-traded funds (ETFs) in the United States, but the approval procedure for these ETH ETFs varied from the one used for the previously approved Bitcoin spot ETFs back in January.
While Bitcoin spot ETFs have been green-lighted by the SEC’s five-member panel headed by Gary Gensler, the approval for Ether spot ETFs came from the Securities and Exchange Commission’s Trading and Markets Division instead.
The SEC granted approval for the 19b-4 applications submitted by notable financial institutions such as BlackRock, Fidelity, Grayscale, Bitwise, VanEck, Ark, Invesco Galaxy, and Franklin Templeton. No further comments were given in conjunction with the official announcement. The filings themselves read:
“For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.”
In the cryptocurrency world, some were puzzled by the differing approval processes for the two proposed ETFs. However, according to Bloomberg ETF analyst James Seyffart, such variations are commonplace.
As a researcher studying regulatory processes, I observed that numerous approvals follow similar procedures. Proposing that the Securities and Exchange Commission (SEC) must hold an official vote for each decision or document seems infeasible due to its impracticality. It would be intriguing to examine the political alignments had there been a vote on these matters.
Although Seyffart clarified the situation, there are still some doubters. A user on X noted that a commissioner has the power to contest the decision within the following 10 days, implying that the use of delegated authority could potentially mask contentious political votes.
Up until now, this aspect of the filing has piqued my interest the most:
— James Seyffart (@JSeyff) May 23, 2024
A user of X suggested that the Securities and Exchange Commission (SEC) may be considering various influences in making its decision, including political pressure leading up to elections and the implementation of environmental, social, and governance (ESG) regulations.
The crypto industry celebrated the SEC’s spot Ethereum ETF approval, calling it a “historic move.”
The SEC’s approval of 19b-4 forms is a necessary step, but it doesn’t mark the start of trading for Ether ETFs yet. The S-1 registration statements are another hurdle to be cleared before debuting on exchanges. The SEC’s review of these registrations could push back the launch timeline by weeks or even months.
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2024-05-24 15:01