SEC’s Gensler Shrugs About New Crypto ETFs Strolling Through His Agency’s Gates

As an experienced financial analyst, I believe the SEC’s approval of Ethereum ETFs is a logical next step based on the agency’s previous actions. The fact that Ethereum had been traded as futures on the Chicago Mercantile Exchange for years and was approved indicates that the SEC sees it as a mature enough asset class to warrant such a move. However, the exact timing of this approval remains unclear, leaving industry insiders guessing when we might see these funds hit the market.

It’s a reasonable assumption that the SEC will give the green light to ETFs based on Ethereum‘s ether following their approval of bitcoin ETFs, according to SEC Chair Gary Gensler’s statements made on two separate occasions on Wednesday.

Ethereum futures have been traded on the Chicago Mercantile Exchange for over three years. The regulatory body carefully examined this and gave its approval. However, it’s important to note that the underlying exchange-traded products (ETPs) still require a disclosure process. This will take some time, but they are currently working on it.

I discovered later on that the SEC staff had given their approval to the applicants’ 19b-4 forms for Exchange-Traded Funds (ETFs) involving Bitcoin, a process that had been initiated four months prior at the commission level.

The way his communications failed to capture the intensity of the developments surrounding the digital assets industry after the January greenlighting of bitcoin spot ETFs by the SEC is noteworthy. Gensler’s stance, however, aligns with his previous statements where he suggested that the SEC’s decision to approve such ETFs was inevitable following the D.C. Circuit Court of Appeals ruling in favor of Grayscale.

Gensler emphasized two weeks ago that the agency adheres to legal guidelines and the courts’ interpretations of the law in its actions.

It is anticipated that Ethereum-backed funds, capable of holding real Ethereum and being traded like other ETFs on demand, may become available this month or the next.

Securities disclosures

Instead of appearing welcoming regarding ETF proposals, Gensler repeatedly expressed his concerns about the crypto sector and its insufficient public disclosure requirements on Wednesday.

I analyzed his statement made on CNBC and found that he pointed out the lack of necessary disclosures for several tokens, not just for making informed investment decisions but also as legally mandated.

When questioned by journalists about his personal view on whether ether qualifies as a security, he referenced the common practice among entrepreneurs and executives who present their initiatives at conferences to generate interest, while reiterating that this did not signify an endorsement of any particular asset.

He emphasized, “These elements signify a security, as I mentioned before in relation to mandatory disclosures. Furthermore, there’s a concern over certain crypto exchanges combining functions, leaving investors without sufficient safeguards as outlined by Congress in the legislation.”

As a result, the industry has faced the various bankruptcies and frauds that it has, he said.

As a researcher examining the impact of the Satoshi Nakamoto bitcoin white paper, I have come to recognize its innovative nature. However, my exploration has led me to observe that this domain remains quite centralized and has not fully realized the decentralized vision outlined in the white paper. Currently, there are only a few key intermediaries in the crypto space where one must entrust their funds and assets.