The Securities and Exchange Commission (SEC) is reportedly making steady progress in its review of the first spot Ether (ETH) exchange-traded funds (ETFs) in the United States, according to SEC Chair Gary Gensler. During a Bloomberg conference on June 25, Gensler provided an update on the status of the ETFs, though he refrained from commenting on a specific timeline for their approval.
“It’s really about the asset managers making the full disclosure so that those registration statements can go effective,” Gensler said. He emphasized the importance of these disclosures for investor decision-making, noting that the SEC’s staff is currently focused on reviewing registration and disclosure statements from asset managers.
On May 23, the SEC approved 19b-4 filings from eight ETF bidders. However, the asset managers involved are still finalizing their Form S-1s—the final documentation required for the SEC’s approval—before the ETFs can commence trading. Some analysts anticipate that the SEC might greenlight these funds for trading as early as the first week of July.
The U.S. crypto industry, which has faced numerous enforcement actions under Gensler’s leadership, has been lobbying to elevate digital assets as a key issue in the upcoming elections. Presidential hopeful Donald Trump has promised to end what he describes as President Joe Biden’s “war on crypto,” while billionaire investor Mark Cuban has argued that Gensler’s actions could jeopardize Biden’s re-election bid.
Gensler, however, avoided discussing the political implications when asked about Trump’s and Cuba’s comments. He maintained that the SEC’s regulatory framework is clear and that compliance with securities laws is essential. “We have a set of rules that are pretty clear. There’s nothing inconsistent about crypto securities and the securities laws,” Gensler stated. He acknowledged that a significant number of crypto tokens likely qualify as investment contracts or securities under U.S. law and criticized the lack of proper disclosure by many in the industry.
“This is a field that the leading lights from a couple of years ago are either in jail, about to go to jail, or are awaiting extradition,” Gensler said, referencing recent high-profile legal cases in the crypto world. He stressed the SEC’s commitment to enforcing compliance, asserting that non-compliance harms the American public.
In response to Gensler’s comments, Ripple CEO Brad Garlinghouse criticized the SEC Chair on social media, calling his statements “absolute nonsense” and accusing him of missing significant issues such as the collapse of FTX. Garlinghouse also suggested that Gensler’s actions could negatively impact Biden’s chances in the upcoming election.
As the SEC continues its review process, the crypto industry and investors alike are eagerly awaiting the potential approval of Ether ETFs, which could mark a significant milestone for digital assets in the U.S. financial markets. The coming weeks will be crucial in determining the regulatory landscape for these innovative financial products.
