Industry Observers: What SEC’s ETH ETF Verdict Means for Ether
The U.S. Securities and Exchange Commission (SEC) just approved ETH ETFs. Its decision to approve 19b-4s has sparked debate on how the regulator views Ether. Industry observers continue to argue whether ETH is a commodity or a security.
According to some industry experts, the U.S. SEC’s approval of spot ETH ETFs is an indirect admission that Ether is, in fact, a commodity. The debate about Ether’s categorization arose after the SEC effectively approved spot ETH ETF applications from eight asset management funds.
Also Read: SEC’s Ethereum Security Classification Could Open ETH ETF Doors, Says BlackRock CEO
BlackRock, Bitwise, ARK 21Shares, Invesco, Grayscale, Galaxy, Fidelity, and Franklin Templeton all received approvals for their 19b-4 applications. However, the issuers omitted ETH staking from their applications to receive these approvals from the SEC.
The approval will continue since the U.S. SEC requires all eight ETH ETFs to provide S-1 registration statements for approval.
Observers Believe Ether Is Effectively a Commodity
According to digital asset lawyer Justin Browder, Ether would undoubtedly be deemed a commodity if the ETH ETFs successfully receive S-1 approvals from the SEC. The S-1 registration statements are needed for the approved ETH ETFs to start trading.
If any of the ETH spot ETFs go effective on Form S-1, the debate is over: ETH is not a security.
There is no legal way for a fund whose assets consist (almost) entirely of securities to go effective on an S-1 (with one exception that doesn’t apply).
— Justin Browder (@jlb410) May 21, 2024
Other observers also highlighted some key points that signaled why the U.S. SEC does not consider ETH as a security. The observations argue that according to the law, funds whose assets are 40% or more securities are considered investment companies and must register on form N-1A or N-2, not the S-1, as required by the U.S. SEC.
“That the SEC is allowing the registration of these funds – whose assets are well north of 40% ETH – via an S-1 means the question is settled: ETH is not security.”
– TuongVy on X.
Industry observers have questioned the U.S. SEC’s requirement to approve S-1 registration statements from ETH ETF issuers.
How The SEC Views ETH Staking
Typically, Exchange-Traded Funds (ETFs) are commodity-based trusts. The U.S. SEC’s move to approve Ether ETFs would suggest the regulator views Ether as a commodity. However, the regulator shied away from addressing Ether’s categorization when issuing ETH ETF approvals.
Also Read: Blackrock’s New Spot Ethereum ETF Filing Excludes Staking
Crypto experts argue that the SEC could potentially view ETH and staked ETH differently. The SEC may distinguish the two and consequently go after staked ETH as a security.
The SEC Officially Approves ETH ETF Applications
This week, this day, has been a rollercoaster unlike any other I’ve seen. ETH is effectively deemed a Commodity as we’ve always known it to be. I’m proud to be on team @Coinbase, the trusted partner and custodian for many of the issuers who had 19b-4’s approved tonight. pic.twitter.com/nz1HHFbBSQ
— paulgrewal.eth (@iampaulgrewal) May 23, 2024
The U.S. SEC officially approved eight issuers of Ether ETFs’ 19b-4 applications, and just a few hours later, the industry heated up with conversations about Ether. The crypto community on X (formerly Twitter) is discussing whether Ether is a commodity, whether S-1 forms will be approved, and why the price of ETH isn’t responding positively to the ETH ETF news.
Cryptopolitan reporting by Collins J. Okoth
Read More
Industry Observers: What SEC’s ETH ETF Verdict Means for Ether
The U.S. Securities and Exchange Commission (SEC) just approved ETH ETFs. Its decision to approve 19b-4s has sparked debate on how the regulator views Ether. Industry observers continue to argue whether ETH is a commodity or a security.
According to some industry experts, the U.S. SEC’s approval of spot ETH ETFs is an indirect admission that Ether is, in fact, a commodity. The debate about Ether’s categorization arose after the SEC effectively approved spot ETH ETF applications from eight asset management funds.
Also Read: SEC’s Ethereum Security Classification Could Open ETH ETF Doors, Says BlackRock CEO
BlackRock, Bitwise, ARK 21Shares, Invesco, Grayscale, Galaxy, Fidelity, and Franklin Templeton all received approvals for their 19b-4 applications. However, the issuers omitted ETH staking from their applications to receive these approvals from the SEC.
The approval will continue since the U.S. SEC requires all eight ETH ETFs to provide S-1 registration statements for approval.
Observers Believe Ether Is Effectively a Commodity
According to digital asset lawyer Justin Browder, Ether would undoubtedly be deemed a commodity if the ETH ETFs successfully receive S-1 approvals from the SEC. The S-1 registration statements are needed for the approved ETH ETFs to start trading.
If any of the ETH spot ETFs go effective on Form S-1, the debate is over: ETH is not a security.
There is no legal way for a fund whose assets consist (almost) entirely of securities to go effective on an S-1 (with one exception that doesn’t apply).
— Justin Browder (@jlb410) May 21, 2024
Other observers also highlighted some key points that signaled why the U.S. SEC does not consider ETH as a security. The observations argue that according to the law, funds whose assets are 40% or more securities are considered investment companies and must register on form N-1A or N-2, not the S-1, as required by the U.S. SEC.
“That the SEC is allowing the registration of these funds – whose assets are well north of 40% ETH – via an S-1 means the question is settled: ETH is not security.”
– TuongVy on X.
Industry observers have questioned the U.S. SEC’s requirement to approve S-1 registration statements from ETH ETF issuers.
How The SEC Views ETH Staking
Typically, Exchange-Traded Funds (ETFs) are commodity-based trusts. The U.S. SEC’s move to approve Ether ETFs would suggest the regulator views Ether as a commodity. However, the regulator shied away from addressing Ether’s categorization when issuing ETH ETF approvals.
Also Read: Blackrock’s New Spot Ethereum ETF Filing Excludes Staking
Crypto experts argue that the SEC could potentially view ETH and staked ETH differently. The SEC may distinguish the two and consequently go after staked ETH as a security.
The SEC Officially Approves ETH ETF Applications
This week, this day, has been a rollercoaster unlike any other I’ve seen. ETH is effectively deemed a Commodity as we’ve always known it to be. I’m proud to be on team @Coinbase, the trusted partner and custodian for many of the issuers who had 19b-4’s approved tonight. pic.twitter.com/nz1HHFbBSQ
— paulgrewal.eth (@iampaulgrewal) May 23, 2024
The U.S. SEC officially approved eight issuers of Ether ETFs’ 19b-4 applications, and just a few hours later, the industry heated up with conversations about Ether. The crypto community on X (formerly Twitter) is discussing whether Ether is a commodity, whether S-1 forms will be approved, and why the price of ETH isn’t responding positively to the ETH ETF news.
Cryptopolitan reporting by Collins J. Okoth
Read More