Ether ETF likely coming as SEC ‘implicitly’ nodded ETH as commodity: Analyst
The United States securities regulator implicitly accepted Ether ( ETH ) as a commodity when it approved Ethereum futures exchange-traded funds last year — meaning a spot ETF variant is likely set for this year, according to Bloomberg ETF analyst James Seyffart.
Speaking during CryptoQuant’s private webinar on Jan. 4, Seyffart alluded to the approval of Ethereum futures ETFs in October 2023, noting that the SEC did not challenge the token classification through the ETFs registration process with the Commodity Futures Trading Commission (CFTC).
"The CFTC is blatantly calling Ethereum a commodity. They do not call them securities. [...] the SEC has approved Ethereum futures ETFs. So again, Gary Gensler will not explicitly say whether Ethereum is a security or a commodity, but in their action, by approving those Ethereum futures ETFs, they're implicitly accepting those Ethereum futures as commodities futures."
Seyffart said the SEC likely had no bandwidth to dispute the token classification.
The first Ether futures ETFs in the U.S. were listed for trading on Oct. 2 , with several investment firms launching a total of nine funds on the Chicago Board Options Exchange (CBOE), including ProShares, VanEck, Bitwise, Valkyrie, Kelly, and Volshares. According to Seyffart, the SEC could find itself in court and have to unlist futures ETFs if it deemed Ether a security.
The classification matters since securities and commodities ETFs face different legal requirements, with different taxes and regulatory burdens attached to securities.
Here we go … expect more spot #ethereum ETFs filings in the coming days.
— James Seyffart (@JSeyff) September 6, 2023
NOTE: this is an S-1 and not a 19b-4. Which means it does not start a clock in any way … yet. Expect 19b-4’s soon. https://t.co/sNus2vr5qV
"It wouldn't just be the SEC going against the crypto industry. If they call Ethereum a security, it'll be going against their sister regulator CFTC [...] that's why I think we could see potential Ethereum ETFs approved this year as well," the analyst noted.
The SEC has recently lost a court case under a similar dispute in which it exempted the SPIKES Index — a stock volatility index — from the definition of security futures under claims of promoting competition among such indexes. "There’s precedent here to say it matters how these things are registered,” said Seyffart.
The SEC has a final decision deadline for VanEck, ARK 21Shares and Hashdex’s spot Ethereum ETF in May 2024, with other spot Ethereum ETF decision deadlines coming in the months following.
Before it, however, the regulator must disclose its verdict on spot Bitcoin ETFs. Seyfartt predicts an approval by Jan. 10 , with $10 billion flowing into Bitcoin ETFs within 12 months.
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