Ethereum Spot ETFs On The Horizon? US SEC Set To Announce Decision This Week

Source Bitcoinist
May 20, 2024 11:00

The much-anticipated Ethereum Spot Exchange-Traded Funds (ETFs) are set to reach a pivotal junction this week as Nate Geraci, President of the ETF Store, has revealed that the United States Securities and Exchange Commission (SEC) is expected to issue a final decision regarding the exchange-traded funds within the week.

Ethereum Spot ETFs Decision Looms

Since the SEC’s ruling may have a significant impact on the direction of Ethereum investment, Nate Geraci‘s revelation has increased expectations in the cryptocurrency and investment landscape.

Geraci emphasized the 19b-4s (changes to exchange rules) and S-1s (registration statements) as the two main components of the SEC’s review procedure. According to the expert, before the Ethereum spot ETFs can be launched, the regulatory watchdog must accept both filings.

When a national securities exchange, such as the NYSE or Nasdaq, wants to launch new products or change rules, they submit a filing to the SEC called a 19b-4s (Exchange Rule Changes). For ETH spot ETFs, the exchanges must obtain the SEC’s approval on the 19b-4s before listing the products and integrating them into their trading platforms.

Meanwhile, S-1s, or registration statements, are the first registration forms needed for newly sold securities to the public. They give the agency and possible investors comprehensive details on the company’s financial situation, management, and business operations. 

In the case of spot ETH ETFs, this filing will cover the fund’s administration, structure, and strategy for emulating Ethereum performance. Thus for the products to be offered to the general public legally, the S-1s and the 19b-4s need to be approved by the SEC, given the significance of both filings.

While Geraci is confident that the Commission might approve the 19b-4s, he thinks the S-1s might see a slow play from the agency, and without the S-1s clearance, the funds cannot be legally allowed to be sold to investors. 

Given the lack of engagement, this might imply an extended period of evaluation and approval of these documents from the agency. Since then, the SEC’s lack of engagement has negatively impacted the funds, which has raised questions and doubts about its approval.

Approval Or Lawsuit From The SEC

It is worth noting that Nate Geraci is one of the top figures in the crypto industry who is pessimistic about the approval of the ETH spot ETFs from the SEC. Geraci previously hinted at the agency’s eerily silence and lower level of engagement as a potential setback for the fund’s clearance in May.

Related Reading: Ethereum Spot ETFs: SEC Commissioner Signals Smooth Path For Approval, ‘No Lawsuit Needed’

Although this makes sense logically, Geraci questions whether the SEC took a lesson from the clown show when it came to spot Bitcoin ETFs. As a result, he has highlighted an approval or legal action from the Commission as two potential outcomes for the ETH spot ETFs.

Presently, the odds around the product’s acceptance are down substantially ahead of the May deadline. Data from the prediction market, Polymarket, shows that the approval odds now stand at 11%.

Ethereum
Disclaimer: For information purposes only. Past performance is not indicative of future results.
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