The US Securities and Exchange Commission (SEC) is getting closer to allowing eight new exchange-traded funds (ETFs) tied to ether, the world’s second-biggest cryptocurrency after Bitcoin. This follows their approval of the first bitcoin ETFs earlier this year.
On Thursday, the SEC approved some rule changes supporting these ether ETFs for big companies like BlackRock, Fidelity, Invesco, and Ark Invest. However, they still need a second round of approvals before these ETFs can launch.
The anticipation of these approvals has already boosted the price of ether by over 20% since Monday and more than 60% since the beginning of the year.
This is a significant shift for the SEC, which had been quiet about this for a while. But on Monday, they suddenly started giving feedback on pending applications, leading to a rush of paperwork and revisions. According to Bloomberg Intelligence, the SEC deadline to respond to applications from VanEck and Ark is this week.
Invesco and Galaxy, a digital assets group, said, “This is a key step to offering Ethereum access through ETFs, making it easier and safer for US investors.” They hope this approval shows the SEC’s willingness to launch these products.
From Bitwise Asset Management, one of the bitcoin ETF issuers, Katherine Dowling, said, “Most of us thought the SEC would disapprove, so this is surprising.”
However, it still needs to be determined when the SEC will give the final go-ahead for these ether ETFs to launch.
SEC chair Gary Gensler, in his explanation on Thursday, underscored the SEC’s cautious approach towards allowing crypto investment products on the US market. He pointed out the numerous fraud cases in the crypto industry, including the one involving FTX founder Sam Bankman-Fried, who was sentenced to 25 years in prison for embezzling billions from his cryptocurrency exchange.
“Our concern is primarily about the widespread non-compliance with US law and the prevalence of frauds and scams in the crypto industry,” Gensler emphasized, reaffirming the SEC’s commitment to maintaining the integrity of the US financial market.
Last year, the SEC lost a court battle with Grayscale Investments, which wanted to turn its bitcoin trust into an ETF. After that, the SEC, somewhat reluctantly, approved Grayscale’s bitcoin product and ten other new ETF launches earlier this year.
