SEC Authorises Ether ETFs for Nasdaq, CBOE, and NYSE

The US Securities and Exchange Commission (SEC) has approved applications from major exchanges, including Nasdaq, CBOE, and the NYSE, to list exchange-traded funds (ETFs) tied to the price of ether. This approval potentially paves the way for these products to begin trading later this year.

Following the SEC's approval of spot Bitcoin ETFs in January, nine issuers, including VanEck, ARK Investments/21Shares, and BlackRock, applied to launch ETFs tied to ether. Despite this positive development, these applicants must still secure approval for ETF registration statements, which detail investor disclosures, before the funds can commence trading.

The SEC stated that after careful review, the commission found the proposals to be consistent with the Exchange Act and the rules and regulations applicable to a national securities exchange. Specifically, the commission determined that the proposals met the requirements of Section 6(b)(5) of the Exchange Act, which mandates that the Exchanges' rules be designed to prevent fraudulent and manipulative acts and practices and to protect investors and the public interest.

Market participants were bracing for a negative outcome, especially given the SEC's lack of engagement on the applications, Reuters reported. However, in an unexpected turn of events, SEC officials requested the exchanges to make swift adjustments to the filings on Monday, leading to a rush to meet the new requirements in a short timeframe.

Despite the approval, the SEC has not set a deadline for deciding on the registration statements, leaving industry participants uncertain about when trading might commence. Optimism surrounding the SEC's approval of Ether ETFs has already pushed the price of the second-largest cryptocurrency up by 25% on the weekly chart. Notably, asset management firms plan to avoid staking.

Staking is the process of holding funds in a cryptocurrency wallet to support the operations of a blockchain network. Specifically, staking represents an effort to secure a volume and derivatives to address regulatory concerns.

In the run-up to the decision-making deadline, SEC Chair Gary Gensler, known for his scepticism toward cryptocurrencies, declined to comment when reporters inquired about the ether ETFs. A spokesperson from the commission also stated that the agency would not provide further comments on the matter. Earlier, a section of the US Congress had urged Gensler to approve ether ETFs.