The Securities and Exchange Commission on Thursday approved applications from Nasdaq, CBOE and NYSE to list exchange-traded funds tied to the worth of ether, potentially paving the best way for the products to start trading later this 12 months.
While the ETF issuers also must get the green light before the products can launch, Thursday’s approval is a significant surprise win for those firms and the cryptocurrency industry, which until Monday had expected the SEC to reject the filings.
Nine issuers including VanEck, ARK Investments/21Shares and BlackRock hope to launch ETFs tied to the second-largest cryptocurrency after the SEC in January approved bitcoin ETFs in a watershed moment for the industry.
Nine issuers including VanEck, ARK Investments/21Shares and BlackRock hope to launch ETFs tied to the second-largest cryptocurrency after the SEC in January approved bitcoin ETFs. REUTERS
“That is an exciting moment for the industry at large,” said Andrew Jacobson, vp and head of legal at 21Shares, noting it was “a major step” towards getting the products trading.
Thursday was the deadline for the SEC to determine on VanEck’s filing. Market participants were bracing for the thumbs-down since the SEC had not engaged with them on the applications.
But in a surprise move, SEC officials on Monday asked the exchanges to quickly fine-tune the filings, sending the industry scrambling to finish weeks of labor in only days, sources said.
Reuters couldn’t ascertain why the SEC appeared to have a change of heart.
“The introduction of spot bitcoin ETFs has already demonstrated significant advantages for the digital assets and ETF space, and we consider that spot ether ETFs will similarly provide safeguards for US investors,” said Rob Marrocco, global head of ETP listings at Cboe Global Markets.
Nasdaq and NYSE declined to comment.
Market participants were bracing for the thumbs-down since the SEC had not engaged with them on the applications. REUTERS
When asked concerning the ether ETFs by reporters at an industry event earlier on Thursday, SEC Chair Gary Gensler – a crypto skeptic – declined to comment. An SEC spokesperson said in an email announcing the approval that the agency wouldn’t comment further.
The exchange applications had sought SEC approval for a rule change required to list recent products, however the issuers still need the SEC to approve ETF registration statements detailing investor disclosures before they’ll start trading.
Unlike the exchange filings, there isn’t a set timeframe through which the SEC has to determine on those statements. Industry participants said it was unclear how long that will take. Two sources aware of the method said many issuers are able to launch, but the company finance division of the SEC has indicated it’s prone to request changes and updates in the approaching days and weeks.
SEC Chair Gary Gensler is a crypto skeptic. AP
The SEC rejected spot bitcoin ETFs for greater than a decade over market manipulation worries but was forced to approve them after Grayscale Investments won a court challenge last 12 months.
Sui Chung, CEO of CF Benchmarks, the index-provider for several of the bitcoin and ether ETFs, said ether is more complex than bitcoin and it could take months for the SEC to review the statements. But because the bitcoin ETFs offer a longtime template, “there’s only a lot slow rolling” the SEC can do, he said.
An array of investors, including hedge funds, wealth advisors and retail investors, have poured greater than $30 billion into the crypto ETFs.
Thursday’s decision is one other tailwind for cryptocurrency industry efforts to push into mainstream finance. This week the UK regulator also approved listed cryptocurrency products while the House of Representatives passed a landmark bill searching for to offer regulatory clarity for cryptocurrencies.
While that bill still must pass the Senate, its extensive bipartisan support marks a significant endorsement for the industry.
