Ethereum ETF gets SEC approval in latest boost for US crypto
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The US Securities and Exchange Commission (SEC) has approved a Spot Ethereum ETF, opening up investment opportunities in the world’s second biggest cryptocurrency.

Cboe BZX Exchange, the Nasdaq and the NYSE had all submitted proposals for the trading of Etherium ETFs, requesting approval of different ETFs each. The SEC decided to combine all the proposals into one for assessment.

In a document signed by J. Matthew DeLesDernier, SEC Deputy Secretary, the Commission concluded that the proposals are consistent with the regulatory requirements of the Exchange Act, and gave final approval for ETF trading to proceed.

The Commission stated it found the proposals to be “reasonably designed to promote fair disclosure of information that may be necessary to price the shares of the Trusts appropriately.” 

It added that the proposals would “prevent trading when a reasonable degree of transparency cannot be assured, to safeguard material non-public information relating to the Trusts’ portfolios, and to ensure fair and orderly markets for the shares of the Trusts”.

The regulator did note some concerns, however, such as environmental concerns – often cited around the topic of cryptocurrency mining in general – and the potential use of Ethereum for fraud and other criminal activity.

Although acknowledging these concerns by some commentators, the SEC stated that its primary regulatory remit is to weigh up the proposals against the Exchange Act. As such, it decided the proposals were worth approving.

This is a significant moment for Ethereum, and the cryptocurrency sector in general, particularly the US market. Approval for the Ethereum ETF has been a long-standing vision for several crypto stakeholders, not least among them Greyscale and Blackrock.

These finance firms were key proponents of the Bitcoin ETF, approved back in January, although they saw their applications for an Ethereum ETF postponed by the SEC shortly after this milestone.

After Bitcoin, Ethereum is the second most widely held, traded and valued cryptocurrency, having been launched in 2015, seven years after Bitcoin. As of the writing of this article (24 May), Ethereum is valued at  $3,662 according to CoinDesk, in comparison to $66,910.

Ethereum’s value has not increased in the immediate aftermath of the SEC approval, in fact according to CoinDesk it is currently just over 3% lower. However, this could change if the same trend witnessed after the Bitcoin ETF approval continues.

Bitcoin’s value skyrocketed to its highest level since 2021 in the aftermath of the ETF approval five months ago. This was further bolstered by the Bitcoin halving event, which occurred last month.

Meanwhile, the Ethereum approval comes at a significant regulatory and legislative moment for crypto in the US. Whilst the SEC has approved this latest ETF, its Chairman, Gary Gensler, remains cautious on the topic of cryptocurrency.

Gensler identified what he believes are a number of gaps in the FIT21 legislation approved by the House of Representatives yesterday. His caution has been shared by US President Joe Biden, although the White House has stated it does not plan to veto the legislation but will instead work with Congress to further refine it.