The United States Securities and Exchange Commission (SEC) has requested public feedback on the possibility of approving a spot Ethereum (ETH) ETF, as stated in a court filing on April 2. The SEC specifically called for comments on the Bitwise Ethereum Trust, Fidelity Ethereum Fund, and Grayscale Ethereum. The agency aims to “perfect the mechanism of a free and open market” and protect investors by facilitating the listing and trading of an additional type of exchange-traded product, according to the court filing. The SEC’s move comes after it approved several spot Bitcoin ETFs in January 2024, which has led to increased mainstream adoption of cryptocurrencies. However, SEC Chair Gary Gensler has cautioned that the approval of spot Bitcoin ETFs does not indicate a willingness to approve listing standards for crypto asset securities, nor does it reflect the agency’s views on the status of other crypto assets or non-compliance with securities laws. The chances of spot Ethereum ETF approval by May are estimated to be low, with some experts putting the odds at 25%. There appears to be a regulatory divide within the SEC, with Chair Gensler taking an anti-crypto stance and favoring regulation-by-enforcement, while Commissioner Hester Pierce has voiced dissent and criticized the agency’s approach. The outcome of this ideological divide remains uncertain regarding the potential approval of spot ETH ETFs.
