Blockchain
US SEC’s Gensler shrugs about new ETH ETFs coming through his agency’s gates
The approval of new exchange-traded funds (ETFs) for Ethereum ether (ETH) is the logical next step after regulator approval of spot bitcoin ETFs, as U.S. Securities and Exchange Commission (SEC) Chairman Gary Gensler suggested twice on Wednesday.
Despite the cryptocurrency sector widespread belief that Gensler’s SEC intended to block the ETH spot ETF before reversing course and accepting the first round of requests, the agency head quickly explained the ongoing approval process as if it were a casual matter, echoing to himself in two separate interviews – in an appearance on CNBC and on the sidelines of an International Swaps and Derivatives Association/Securities Industry and Financial Markets Association event.
“Ethereum has been trading on the Chicago Mercantile Exchange futures for more than three years. And the staff looked at it closely, and it was approved,” Gensler said in the television interview. “Now, the underlying Exchange Traded Products (ETPs) still have to go through a process to get disclosure about this. It will take some time, but they are working on it right now.”
He later told reporters that SEC staff approved ETF applicants’ Forms 19b-4 “because four months earlier, at the commission level, we had approved bitcoin exchange-traded products.”
His updates did not reflect the drama associated with this important moment for the digital asset sector, which would follow the January approval of previous bitcoin spot ETFs that already redefine the status of (BTC) as a commercial activity. Gensler’s tone agrees, however, with another of his recent appearances, in which he indicated that once the D.C. Circuit Court of Appeals sided with Grayscale against the SECthe regulator’s hand was forced when it came to approving such ETFs.
“We do this within the law and how the courts interpret the law, and that’s what I’m deeply committed to,” Gensler said said two weeks agoafter noting on stage at the event that the agency is trying to act in accordance with the court’s ruling.
This position would suggest that the SEC would always approve ETH ETFs, just like BTC.
Furthermore, despite Gensler’s seemingly optimistic explanation of the current process with ETH applications, his comments leave one key question still hanging in the air: He said “it will take some time,” but when might this final approval happen? The precise answer doesn’t seem clear, so far.
Some expect the funds, which will hold the actual ETH directly and could be easily traded at any time just like other ETFs, will emerge this month or next.
Aside from his apparent openness about ETF inquiries, Gensler on Wednesday reiterated his usual warnings about the cryptocurrency industry and its lack of required public information.
He told CNBC that many of the tokens “did not provide you with the information you need not only to make your own investment decisions, but also required by law.”
When reporters asked him if he personally believes Ether is a stock, he highlighted the fact that entrepreneurs and executives speak at conferences to promote their projects (while making his usual disclaimer of not talking about any specific assets).
“These are clues to a security,” he said, reiterating his earlier statement about the information required by law. “Additionally, there are so-called cryptocurrency exchanges that mix and bundle functions where you, the investing public, do not have adequate congressional protection under the laws.”
As a result, he said, the industry faced numerous bankruptcies and frauds.
While Gensler said Satoshi Nakamoto’s bitcoin white paper may have been “innovative,” Gensler said, “this is a pretty centralized field, which hasn’t lived up to the vision, Nakamoto’s vision when there’s just a small handful of crypto intermediaries that you’re trusting with your money, your assets.”