SEC Chair Gary Gensler said the regulator expects to approve the spot Ethereum ETF applications’ S-1 registration forms “sometime over the course of this summer,” which would be the final step before the funds can launch in the US.
Gensler confirmed that the ETFs would be able to launch by the end of summer, well before the November presidential elections.
The watchdog recently approved the related 19b-4 applications filed by stock exchanges in May. However, the approval of S-1 registration forms from individual issuers is still pending.
Gensler said during a Senate hearing on June 13 that:
“Individual issuers are still working through the registration process. That’s working smoothly.”
Senator Bill Hagerty commended Gensler on committing to him that the applications would be approved by the end of summer. He added:
“We’ve gotta get this market.”
Launch timeline, commodity classification
Gensler’s timeline aligns with predictions made by industry experts in recent weeks.
Bloomberg ETF analysts suggested that the S-1 documents’ approval could take “weeks” to “months” following the 19b-4 approvals. Similarly, others, including JP Morgan, have predicted that the ETFs will begin trading before the November elections.
At this point, despite the pending S-1 approval, the introduction of spot Ethereum ETFs in the US is seen as inevitable. Furthermore, Ethereum is now considered a commodity by many in the industry, including legal experts, who argue that the SEC’s approval of Ethereum as a single-asset ETF product implies its classification as a commodity.
However, when questioned by the Senate, Gensler did not clarify whether Ethereum is classified as a security or commodity. He skirted the question and did not give a clear answer, claiming the agency had only “partially” approved Ethereum ETFs.
Meanwhile, CFTC Chair Rostin Behnam told the Senate very clearly that Ethereum was a commodity and should be supervised by his agency.
Concerns over budget stipulation
Gensler also addressed the SEC’s fiscal year 2025 budget request, highlighting the significant growth and changes in the markets. He said:
“Our limited resources contrast against the tremendous growth and change in our markets.”
He added that the SEC currently oversees approximately 40,000 entities, including more than 13,000 registered funds, 15,400 investment advisers, and 3,300 broker-dealers.
Gensler expressed concern over a stipulation in the agency’s fiscal year 2025 funding bill by the House Appropriations Committee, which restricts funds from being used for enforcement actions related to digital asset transactions, except for fraud or market manipulation.
Gensler said:
“It would seriously undercut our efforts. While not all cryptos are crypto securities… those that are have an obligation to disclose to the public full, fair, and complete information.”
The SEC chair highlighted the agency’s critical role in maintaining market integrity and protecting investors. He also emphasized the importance of adequate funding to keep pace with the rapidly evolving markets and technological advancements.
He told the Senate:
“The SEC is the cop on the beat watching out for the investing public and issuers.”
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