FameEX Hot Topics | Gary Gensler Says Approval for Spot Ether ETFs Will 'Take Some Time'

On June 5, SEC Chair Gary Gensler spoke on CNBC, indicating potential delays in the approval process for spot Ether ETFs, highlighting regulatory hurdles that could extend the timeline for their listing on U.S. exchanges. The discussion comes in the wake of the SEC’s initial green light on May 23 to 19b-4 filings from major firms including VanEck, BlackRock, Fidelity, Grayscale, and others, which was a significant step towards integrating Ether ETFs into mainstream financial markets.

Despite this progress, Gensler emphasized that final approvals, necessary for the ETFs to be listed and traded, might still be months away. This cautious approach stems partly from the SEC's ongoing concerns with how cryptocurrency firms operate outside the regulatory frameworks applicable to traditional exchanges. Gensler’s comments reflect a consistent stance on maintaining strict regulatory oversight.

The backdrop to these regulatory maneuvers includes a recent legal setback for the SEC, where a Utah judge ordered the commission to pay $1.8 million due to “bad faith conduct” in court. This incident underscores the complexities and challenges the SEC faces as it navigates the uncharted waters of cryptocurrency regulation. Moreover, the process for approving spot Ether ETFs differs from that of their Bitcoin counterparts. Unlike the spot Bitcoin ETFs, which required a vote from the five SEC commissioners, the Ether ETFs received approval directly from the SEC’s Trading and Markets Division. This procedural variance points to a nuanced regulatory approach to different types of crypto assets.

Gensler, whose term as SEC Chair is expected to last until 2026, presides over a period of significant scrutiny and evolution in cryptocurrency regulation. The departure of SEC Commissioner Caroline Crenshaw on June 5 adds another layer of uncertainty to the commission’s future actions. At the time of reporting, President Joe Biden had not announced whether a new nomination would be made to replace Crenshaw or if she would continue in some capacity.

The pathway to launching spot Ether ETFs appears paved with regulatory caution and procedural rigor, reflecting the SEC’s broader strategy to integrate crypto investments into the regulated financial landscape while addressing the unique risks associated with digital assets. As the crypto market waits for a definitive launch date, which was speculated by Bloomberg ETF analyst Eric Balchunas to be as soon as July 4, the industry remains poised at the intersection of innovation and regulation.

Disclaimer: The information provided in this section is for informational purposes only, doesn't represent any investment advice or FameEX's official view.