SEC Chair Gary Gensler has reported smooth progress in the launch of the first spot Ether exchange-traded funds (ETFs) in the United States. Speaking at a recent Bloomberg conference on June 25, Gensler avoided specifying a timeline for the ETFs’ release and declined to comment on their potential debut before the November U.S. elections.
Gensler stressed the critical importance of asset managers providing comprehensive disclosure in their registration statements, a prerequisite for the ETFs to become operational. “What lies before us, handled at the staff level, are the registration and disclosure statements,” Gensler clarified.
Despite the SEC’s approval of 19b-4 filings from eight ETF applicants on May 23, asset managers are still refining their Form S-1 submissions. These final filings necessitate SEC approval before the ETFs can begin trading, with some analysts speculating approval could arrive as early as the first week of July.
In the context of upcoming elections, the U.S. crypto industry has actively sought to elevate digital assets as a significant electoral issue, particularly amid heightened SEC enforcement actions under Gensler’s leadership. Presidential candidate Donald Trump has pledged to cease what he termed President Joe Biden’s “crypto war,” while billionaire investor Mark Cuban suggested that Gensler’s regulatory actions might influence election outcomes.
Regarding these remarks, Gensler declined election-related discussions and instead reaffirmed the clarity of existing rules governing crypto securities and securities laws. He emphasized the repercussions of non-compliance, stating, “Crypto securities and securities laws are not mutually exclusive… Unfortunately, many individuals fail to adhere to these laws.”
Highlighting the regulatory landscape, Gensler noted that approximately 20,000 crypto tokens qualify as investment contracts or securities under U.S. law but lack adequate disclosure for American investors.
Meanwhile, several leading asset managers, including VanEck, BlackRock, Grayscale, Invesco Galaxy Digital, and Fidelity, have submitted updated proposals for Ethereum ETFs to the SEC. These filings aim to provide revised information on their respective Ethereum funds. VanEck’s submission, for instance, disclosed a 0.20% management fee for its Ethereum fund, comparable to competitors such as Franklin Templeton, which charges a 0.19% management fee.
Amid these developments, Eric Balchunas, an analyst at Bloomberg, highlighted that the launch of spot ETFs could potentially trigger a significant drop in Ether’s price, with predictions suggesting it could plummet to as low as $2,400. Andrew Kang, founder and partner at Mechanism Capital, attributed this anticipated drop to Ether’s lesser institutional appeal compared to Bitcoin and limited incentives for converting spot Ether into ETFs.
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