In a significant regulatory shift, the US Securities and Exchange Commission (SEC) partially approved the long-awaited Ethereum ETF filings submitted by prominent asset managers three weeks ago, including BlackRock and Grayscale.
SEC Chairman Gary Gensler has indicated that full approval for these Ethereum ETFs could come by the end of the summer, providing much-needed clarity for investors eagerly awaiting this decision.
Senate Hearing Reveals Potential Approval Of Ethereum ETFs
During a Senate Banking Committee hearing on Thursday, Chair Gensler, responding to queries from Senator Bill Hagerty, expressed his belief that spot Ethereum ETFs will likely receive approval by the end of the summer.
This timeline aligns with the end of the summer season on September 22, potentially paving the way for S-1 approval of the Ethereum ETFs just in time for the November US elections, where crypto has become a prominent issue in the race for the White House.
The hearing also touched upon the regulatory challenges posed by the rapidly evolving cryptocurrency industry. Senator Richard Durbin inquired about the Commodity Futures Trading Commission’s (CFTC) ability to regulate crypto assets effectively.
Gensler highlighted the need for “proper resources and a well-defined disclosure” regime at the CFTC. Senator Hagerty stressed the importance of regulatory clarity, urging the SEC to foster an ecosystem that prevents the offshore migration of the crypto industry.
Gensler countered by differentiating between unlawful activities, personal preferences, and the need for regulatory clarity, suggesting a distinction between disliking the law and the lack of clarity.
Interestingly, Gensler referenced the SEC’s approval of futures Ethereum ETFs last year but refrained from providing a definitive answer when asked whether he considered Ethereum a commodity.
This ambiguity highlights the ongoing debate surrounding the classification of cryptocurrencies and the jurisdictional dispute between the SEC and the CFTC.
CFTC And SEC Clash Over Crypto Classification
It is worth noting that the CFTC had previously reaffirmed its stance, classifying Ethereum and several other cryptocurrencies as commodities, further fueling the battle for regulatory oversight within the digital asset industry.
This contrasts the SEC’s position, spearheaded by Chair Gensler, which currently designates only Bitcoin as a commodity, leaving other cryptocurrencies, including Ethereum, outside this classification.
The ongoing struggle over cryptocurrency classification has a history, exemplified by the CFTC’s lawsuit against Binance last year, where Ethereum and Litecoin were also deemed commodities.
Ultimately, this latest development underscores the need for resolution and regulatory clarity within the cryptocurrency ecosystem to ensure a robust and well-functioning industry.
At the time of writing, ETH was trading at $3,450, down 4% in the 24-hour time frame, led by Bitcoin, which also fell to the $66,900 level, down over 3% in the same time frame.
Featured image from DALL-E, chart from TradingView.com