US SEC Approves Exchange Application to List Spot Ether ETF

The U.S. Securities and Exchange Commission (SEC) on Thursday approved applications from Nasdaq, CBOE and NYSE to list exchange-traded funds (ETFs) linked to the price of ether, potentially launching the products later this year. The path was paved for starting the business.

While ETF issuers must also receive the green light before launching products, Thursday’s approval is a major surprise win for firms and the cryptocurrency industry that had expected the SEC to reject filings by Monday.

Nine issuers including VanEck, ARK Investments/21Shares and BlackRock expect to launch ETFs tied to the second-largest cryptocurrency at a key moment for the industry after the SEC approved a Bitcoin ETF in January.

“This is an exciting moment for the industry at large,” said Andrew Jacobson, vice president and head of legal at 21Shares, adding that it was “an important step” toward trading the products.

Thursday was the deadline for the SEC to make a decision on VanEck’s filing. Market participants were ready to reject it because the SEC had not negotiated the applications with them.

But in a surprise move, SEC officials on Monday asked exchanges to quickly fix the filings, forcing the industry to complete weeks of work in a matter of days, sources said.

Reuters could not find out why the SEC had its change of heart.

Rob Marocco, Global Head of ETP Listings at Cboe Global Markets, said, “The launch of the Spot Bitcoin ETF has already demonstrated significant benefits for the digital asset and ETF space, and we believe the Spot Ether ETF will be a valuable asset for US investors.” Will provide security measures for.”

Nasdaq and NYSE declined to comment.

Asked about an Ether ETF by reporters at an industry event on Thursday, SEC Chairman Gary Gensler — a crypto skeptic — declined to comment. An SEC spokesperson said in an email announcing the approval that the agency would have no further comment.

Exchange applications sought SEC approval for rule changes needed to list new products, but issuers are still required by the SEC to approve ETF registration statements detailing investor disclosures before they can begin trading. .

Unlike exchange filings, there is no set deadline in which the SEC must make a decision on those statements. Industry participants said it was unclear how long this would take. Two sources familiar with the process said many issuers are ready to launch, but the SEC’s corporate finance division has indicated it is likely to request changes and updates in the coming days and weeks.

The SEC had rejected spot Bitcoin ETFs for more than a decade due to market manipulation concerns, but was forced to approve them after Grayscale Investments won a court challenge last year.

Sui Chung, CEO of CF Benchmark, the index-provider of several bitcoin and ether ETFs, said ether is more complex than bitcoin and it could take several months for the SEC to review the statements. But since Bitcoin ETFs offer an established template, the SEC “can only do so much slow rolling,” he said.

A range of investors, including hedge funds, wealth advisors and retail investors, have invested more than $30 billion in crypto ETFs.

Thursday’s decision is another tailwind for efforts to push the cryptocurrency industry into mainstream finance. This week the UK regulator also approved listed cryptocurrency products, while the US House of Representatives passed a landmark bill to provide regulatory clarity for cryptocurrencies.

Although that bill still needs to pass the Senate, its broad bipartisan support is a major endorsement for the industry.

© Thomson Reuters 2024

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