In a recent budget hearing, SEC Chair Gary Gensler confirmed to senators that the approval process for ether spot ETFs should be completed by this summer.
Gary Gensler, Chair of the Securities and Exchange Commission (SEC), revealed during a Senate Appropriations Committee budget hearing that the final approvals for ether spot Exchange-Traded Funds (ETFs) are on track to be finalized by the end of summer. He emphasized that the process is progressing smoothly, with remaining tasks primarily involving staff-level registration details.
Gensler highlighted that ether ETFs are practically approved, stating, “All that remains are the registration details getting hammered out at the staff level.” This marks a significant step towards making ether ETFs available for trading, much like the previously approved bitcoin spot ETFs.
During the hearing, Gensler reiterated his concerns about the noncompliant nature of the crypto industry, yet he did not clarify whether Ethereum (ETH) should be classified as a commodity. This ambiguity aligns with the SEC’s ongoing cautious stance. Meanwhile, Commodity Futures Trading Commission (CFTC) Chair Rostin Behnam explicitly identified ETH as a commodity, underscoring a divergence in regulatory perspectives.
The approval of ether ETFs signifies a notable development, following the earlier challenges faced by bitcoin ETFs. Initially, the SEC had blocked bitcoin ETFs until a federal court mandated the agency to reconsider its stance, leading to their eventual approval. The upcoming ether ETFs will provide investors with more accessible trading options, holding actual ether and further integrating cryptocurrencies into mainstream financial markets.
Gensler’s reluctance to label ETH as either a security or commodity highlights the ongoing debate over the classification of digital assets. He noted, “While not all crypto are crypto securities – some are under Chair Behnam’s jurisdiction – those that are have an obligation to disclose to the public.” This statement reflects his position that most digital assets should be considered securities, a view not uniformly accepted across regulatory bodies.
Behnam, on the other hand, confirmed the CFTC’s jurisdiction over certain digital assets, expressing a need for expanded regulatory tools to effectively oversee the evolving crypto market. He stated, “We don’t have those traditional regulatory tools – registration, custody, surveillance, oversight – that have really made American capital markets and derivative markets so strong.” He emphasized that additional resources and authority would be necessary to enhance the CFTC’s regulatory capabilities.
The hearing also touched upon the CFTC’s stance against prediction markets, such as those popularized by PredictIt, Polymarket, and Kalshi. Behnam reiterated the agency’s position against election-related contracts, stating, “The last thing we need right now is sort of commoditizing elections. This, in my view, is clearly against existing law, and we’re taking steps to make sure they’re banned.”
As the regulatory landscape for digital assets continues to evolve, the final approval of ether ETFs will be a significant milestone, reflecting the broader acceptance and integration of cryptocurrencies within the traditional financial system.
