As a seasoned crypto investor with a keen interest in regulatory developments, I find Alex Thorn’s perspective on the potential Ethereum ETF approval loophole intriguing. If his analysis proves accurate, it could pave the way for spot Ethereum ETFs to enter the market while maintaining regulatory consistency.
Alex Thorn, the Head of Research at Galaxy Research, proposed a possibility: The Securities and Exchange Commission (SEC) might distinguish between Ethereum (ETH) and staked Ether, potentially categorizing the latter as a security.
This observation raised the possibility that this distinction could be exploited to permit the approval of Ethereum spot ETFs through regulatory channels.
Spot Ethereum ETF Approval Loophole
In his May 21 post on X, he expressed the belief that if rumors of a change in stance from the SEC regarding Ethereum ETFs are accurate, the regulatory body may attempt to distinguish between “ETH” being classified as a non-security and “staked ETH” or even “staking as a service ETH” being considered securities.
As a researcher, if the rumors about a potential 180-degree shift in the Securities and Exchange Commission (SEC) regarding Ethereum Exchange-Traded Funds (ETFs) are accurate, I would hypothesize that the SEC is attempting to navigate a delicate balance between classifying “ETH” as a non-security and recognizing “staked ETH” or even “staking-as-a-service ETH” as securities.
that would be somewhat congruent with…
— Alex Thorn (@intangiblecoins) May 21, 2024
As an analyst, I would interpret this potential distinction as follows: This difference could significantly influence the SEC’s decision-making process regarding spot Ethereum Exchange Traded Funds (ETFs). Given the ongoing legal battles and investigations, approving such ETFs while staying consistent with past arguments and positions might be achievable through this shift.
Thorn points out that using this method may come with certain limitations for Ethereum ETFs. He proposes a possibility where the SEC could prevent ETFs from staking their Ethereum holdings.
Through recognizing the difference between unstaked Ethereum (ETH) and staked ETH, the Securities and Exchange Commission (SEC) might permit the listing of Ethereum spot exchange-traded funds (ETFs), while preserving a stringent regulatory regime for staked assets and other cryptocurrencies.
SEC Approval Optimism
As an ETF analyst at Bloomberg Intelligence, I’ve recently revised my prediction for a spot Ethereum Exchange-Traded Fund (ETF) approval from 25% to 75%, effective as of Monday. This shift in estimation stems from recent discussions indicating that the Securities and Exchange Commission (SEC) could adopt a more favorable position towards these applications.
Based on recent developments, the probability of the SEC approving a spot Ether ETF has risen significantly, up to 75% from the initial 25%. There are indications that the SEC may be reconsidering its stance on this contentious issue. As a result, all parties involved, including JSeyff and myself, are working diligently to prepare for this potential outcome. Previously, it was widely assumed that an Ether ETF would not be approved.
— Eric Balchunas (@EricBalchunas) May 20, 2024
As a researcher studying regulatory developments in the financial sector, I came across an intriguing May 20th post by Balchunas that raised some thought-provoking insights. He suggested that the Securities and Exchange Commission (SEC) might be expediting its approval process for exchange-traded funds (ETFs) due to political pressure, in contrast to their historically hands-off approach with ETF applicants.
As an analyst, I’d clarify that our previous analysis focused solely on the implications of a potential 19b-4 approval for a VanEck spot Ethereum ETF. However, it is essential to acknowledge that such an approval would not be the final step in the process. The SEC has yet to rule on the related S-1 filing, which could take anywhere from several weeks to months before we see a live Ethereum ETF. Therefore, while the May 23rd decision regarding the VanEck spot Ether ETF is highly anticipated, it represents only one piece of the regulatory puzzle.
If our assumptions prove true and we obtain the theoretical approvals by the end of this week, then securing S-1 approvals will become a question of “when” rather than “if.”
Recently, there’s been a significant increase of more than 20% in Ethereum’s worth, fueled by optimistic reports suggesting that the Securities and Exchange Commission (SEC) could sanction spot Ethereum Exchange-Traded Funds (ETFs). This comes as a surprise to many, given previous market speculation that SEC approval was an unlikely scenario.
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2024-05-21 23:33