Chairman Gary Gensler's recent statements shed light on the approval process for United States spot Ether exchange-traded funds (ETFs). Gensler emphasized that the speed of approvals would depend on how swiftly issuers address comments from the Securities and Exchange Commission (SEC). This stance indicates that the SEC is not inclined to prolong the process unnecessarily.
While the SEC approved eight 19b-4 filings for spot Ether ETFs on various U.S. exchanges on May 23, trading cannot commence until the required S-1 registration statement approvals are obtained. Gensler highlighted the self-motivation of registrants to address comments promptly, placing the responsibility on them for responsiveness.
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These insights provide clarity following Gensler's earlier remarks on CNBC, where he suggested that the next steps would "take some time." Some interpreted this to mean that the commission might delay signing off on the S-1 Forms. Bloomberg ETF analyst Eric Balchunas previously speculated that the approval process could span weeks or months, with the first week of July being his base case.
The recent change in tone from the Securities and Exchange Commission (SEC) regarding spot Ether ETFs just days before the initial decision deadline has raised questions. Chairman Gary Gensler hinted to Reuters that this shift may have been influenced by Grayscale's legal challenge concerning a Bitcoin ETF last year.
Grayscale successfully argued in court that since the SEC had approved Bitcoin futures ETFs, there was no valid reason to reject spot Bitcoin ETFs. This argument played a pivotal role in the approval of Bitcoin ETFs. Gensler indicated that Ethereum's case was analogous, with SEC staff examining the filings and assessing various correlations. They found that the correlations in the Ether space were relatively similar to those in the Bitcoin space.
Inside the Political Moves Behind the Ether ETF Reversal
Bloomberg ETF analyst James Seyffart, who had been anticipating a low likelihood of approval for Ether ETFs for months, offered an alternative perspective on X. He suggested that the reversal on Ether ETFs might have been influenced by SEC Commissioner Jamie Lizárraga, who has ties to Nancy Pelosi, a prominent figure in the Democratic Party.
Seyffart speculated on a Bits+Bips podcast with Unchained, mentioning Lizárraga's previous role as Nancy Pelosi's right-hand man. According to Seyffart, there were discussions indicating that Democrats in the Senate and the House were concerned about the perception of cryptocurrencies among the public and the growing number of cryptocurrency owners.
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Pelosi's involvement in cryptocurrency legislation adds an intriguing layer to the discussion. She was among the House Democrats who supported the Financial Innovation and Technology for the 21st Century Act (FIT21) crypto bill, which passed a vote in the U.S. House of Representatives on May 22. This bill marked a significant moment for the cryptocurrency industry and was seen as a positive step toward regulatory clarity and innovation in the sector.
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