SEC Chair Gary Gensler recently announced that the regulator expects to approve spot Ethereum ETF applications’ S-1 registration forms by the end of summer, allowing the funds to launch in the US before the November presidential elections. The approval of S-1 registration forms from individual issuers is the final step in the process, following the recent approval of related 19b-4 applications by stock exchanges.
Industry experts have predicted that the approval of S-1 documents could take “weeks” to “months” following the 19b-4 approvals, with some expecting the ETFs to begin trading before the elections. Ethereum is now considered a commodity by many in the industry, and the SEC’s approval of Ethereum as a single-asset ETF product implies its classification as such. However, during a recent Senate hearing, Gensler did not confirm whether Ethereum is classified as a security or commodity, despite CFTC Chair Rostin Behnam stating clearly that Ethereum is a commodity.
Gensler also expressed concerns over the SEC’s fiscal year 2025 budget request, highlighting the agency’s limited resources compared to the significant growth and changes in the markets. He specifically mentioned a stipulation in the funding bill that restricts funds from being used for enforcement actions related to digital asset transactions, except for fraud or market manipulation. Gensler emphasized the SEC’s crucial role in maintaining market integrity and protecting investors, underscoring the need for adequate funding to keep pace with market developments.
Overall, the introduction of spot Ethereum ETFs in the US is seen as inevitable, with Gensler confirming that individual issuers are working through the registration process smoothly. The approval of S-1 registration forms is expected in the coming weeks, aligning with industry predictions of the ETFs launching before the November elections. As the SEC continues to navigate the evolving landscape of digital assets, regulatory clarity around the classification of Ethereum as a commodity or security remains a key issue for market participants and investors.
