The approval timeline for U.S.-based spot Ether exchange-traded funds (ETFs) depends on how quickly issuers can respond to comments from the Securities and Exchange Commission (SEC), according to SEC Chair Gary Gensler. Gensler’s statements indicate that the responsibility for approvals lies with the Ether issuers and suggest that the SEC will not unnecessarily delay the process.
On May 23, the SEC approved eight 19b-4 filings for listing spot Ether ETFs on various U.S. exchanges. However, trading cannot commence until the required S-1 registration statements are approved. Gensler noted that registrants are self-motivated to address comments but emphasised that the speed of their responses is up to them.
These remarks clarify Gensler’s earlier comments on CNBC, where he mentioned that the next steps would “take some time,” leading some to believe that the SEC might prolong the approval process. Bloomberg ETF analyst Eric Balchunas previously stated that the process could take weeks or months, predicting early July as a possible timeframe.
Grayscale Challenge Influenced Ether ETF Decision
The SEC has not explicitly stated why it changed its stance on spot Ether ETFs shortly before the first decision deadline. However, Gensler suggested that the shift was influenced by Grayscale’s 2023 legal challenge regarding Bitcoin ETFs. Grayscale argued that the SEC’s approval of Bitcoin futures ETFs should logically extend to spot Bitcoin ETFs, a reasoning that played a role in the approval of spot Bitcoin ETFs in January. Gensler pointed out that the SEC staff found similar correlations between Bitcoin and Ether filings.
Alternate Theory: Nancy Pelosi-Linked SEC Commissioner
Bloomberg ETF analyst James Seyffart proposed an alternate theory on why the SEC reversed its position on Ether ETFs. He suggested that SEC commissioner Jamie Lizárraga, who has ties to influential Democrat Nancy Pelosi, might have influenced the decision. Seyffart noted that Democratic members of the Senate and House were concerned about crypto polling data and ownership rates. Pelosi, along with other House Democrats, supported the Financial Innovation and Technology for the 21st Century Act (FIT21) crypto bill, which passed in the House on May 22, marking a significant moment for crypto legislation.