SEC Chair Gensler Says Ethereum ETF Approval Process is “Going Smoothly”

Highlights:

• Gary Gensler said the Spot Ethereum ETF trading approval process is going smoothly.
• Gensler mentioned that applicants must make appropriate disclosures before launching their products.
• He declined to comment on the ETH ETF launch date, Trump’s support for crypto, and the industry’s criticisms of the SEC.

Speaking at a June 25 Bloomberg Invest Summit in New York, Gary Gensler, the Chairman of the US Securities and Exchange Commission (SEC), said the process of launching spot Ethereum ETFs in the United States is “going smoothly. However, Gensler stated that he is uncertain about the exact timeline for these products to start trading. He emphasized that asset managers need to make appropriate disclosures before the launch. 

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He elaborated:

“It’s really about the asset managers making the full disclosure so that those registration statements can go effective.”

The SEC chair mentioned that Ethereum futures ETFs are already available, having launched last year. However, the possibility of introducing a spot Ethereum ETF has sparked considerable excitement in both the crypto community and financial markets. Some analysts predict that the SEC could approve the funds for trading as early as the first week of July.

Crypto Takes Center Stage in US Election Amid SEC Crackdown

The US crypto industry has raised funds and pushed to make digital assets a key election issue in response to increased enforcement actions by SEC Chair Gensler. As the election approaches, Republican presidential candidate Donald Trump has significantly increased his support for crypto in recent months. This increases his chances of becoming the next US President. 

Trump also announced that he would accept political donations in crypto and vowed to halt “Joe Biden’s crusade to crush crypto.” Moreover, billionaire investor Mark Cuban claimed Gensler’s actions could “literally cost Joe Biden the election.”

“I don’t speak about elections,” Gensler stated when asked about Trump’s growing support for cryptocurrencies and criticisms from figures like Cuban.

Gensler stated:

“I just really look, my role as a securities regulator, as chair of this great 5,000-person agency that oversees $120 trillion capital markets. We are here to look out for investors, look out for issuers, and, where appropriate, to be a cop on the beat.” 

Gary Gensler, chair of the US Securities and Exchange Commission, says "there's nothing inconsistent about crypto securities and the securities laws," but he does say they are still being broken https://t.co/518XPTe1fq pic.twitter.com/CtvqUOpSfR

— Bloomberg TV (@BloombergTV) June 25, 2024

Ripple CEO Criticizes Gensler’s Comments

On Tuesday, Gensler claimed that up to 20,000 crypto tokens are investment contracts or securities under US law, lacking “proper disclosure” for American investors. He also commented that individuals who were once prominent in this field a few years ago are either in jail, facing imminent imprisonment, or awaiting extradition.

"This is a field where the leading lights from a couple of years ago are either in jail, about to go to jail, or awaiting extradition." @SECGov Chair @GaryGensler #BloombergInvest @annmarie pic.twitter.com/KP6kyzwHTk

— Bloomberg Live (@BloombergLive) June 25, 2024

In a June 26 post on X, Ripple CEO Brad Garlinghouse criticized Gensler’s comments as “absolute nonsense,” stating that the SEC boss had “completely missed the mark on FTX.” He added: “Gensler will cause Biden to lose the election.”

Absolute nonsense coming from @GaryGensler today.

And this slander about “all crypto execs going to jail” from the man who completely missed FTX (and actually cozied up to SBF), and wasn’t even invited to the DOJ announcement about Binance.

If he was really “working for the… https://t.co/c3ynB5Gncl

— Brad Garlinghouse (@bgarlinghouse) June 25, 2024

SEC Actively Reviewing Ethereum ETF Applications

Gensler’s latest announcement indicates that the commission is reviewing submissions from applicants. Last month, the SEC approved the 19b-4 forms from VanEck, Franklin Templeton, ARK 21Shares, BlackRock, Fidelity, Grayscale, Invesco Galaxy, and Bitwise. Despite obtaining approvals, trading cannot commence until issuers receive the SEC’s final sign-off on their S-1 registration statements.

The US regulator received S-1 amendments from all eight spot Ethereum ETF filers last week. These amendments include additional details about sponsor fees and seed investments. Bitwise and Fidelity were among the first institutions to file their S-1 amendments. When Fidelity updated its filing, Bloomberg’s Senior ETF Analyst Eric Balchunas highlighted that the financial institution omitted a sponsor fee. 

Similarly, Balchunas observed that filings from Bitwise and BlackRock also lacked fee disclosures. To date, Franklin Templeton and VanEck have disclosed their sponsor fees at 0.19% and 0.20%, respectively. Moreover, VanEck has recently filed the 8-A Form for its spot Ethereum ETF, advancing towards S-1 approvals. If approved, the 8-A form would allow the investment management firm’s clients to trade products on the exchange after spot ETH approval.

VanEck just filed 8-A form for spot Eth, which is just part of process, but.. should be noted that they filed their 8-A for spot bitcoin exactly 7 days before launch. Good sign for our July 2nd over/under (7 days from now). But again, anything poss. Sure we'll hear more soon.. https://t.co/2BlkDnWhrz

— Eric Balchunas (@EricBalchunas) June 25, 2024

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