[With the SEC issuing a major notice, the possibility of Ethereum ETF approval increases]
The U.S. Securities and Exchange Commission (SEC) has issued an official notice regarding the approval of an Ethereum exchange-traded fund (ETF). The notice, uncovered by financial lawyer Scott Johnson, highlights that the proposed ETF will face intense scrutiny and points to potential obstacles to its approval.
On social media platform question."
The key question is whether the proposed Ethereum ETF meets regulatory standards, specifically its classification as a commodity-based trust share under Nasdaq Rule 5711(d). Additionally, Johnson highlighted the SEC's obligation under 15 U.S.C. 78s(b)(2)(B) to provide notice of reasons for disapproval, citing concerns about the trust's underlying assets and their classification.
The notice states: “Pursuant to section 19(b)(2)(B) of the Act, the Commission is providing notice of reasons for its consideration of disapproval. The Commission is conducting proceedings to review proposed rule changes consistent with Section 6(b) of the Act. (5) for additional analysis.”
Specifically, the SEC is investigating whether the Ethereum Trust properly made its proposal to list and trade the shares, given the nature of the underlying assets and its compliance with regulatory standards. Johnson reveals potential hurdles in the approval process for an Ethereum ETF.
“The apparent intent is that these spot filings were improperly filed as commodity-based trust shares that would not qualify if they held a security,” he commented in Conflicting stance on approval and Ethereum ETF decision.
Johnson pointed out that the SEC has never questioned the classification of Bitcoin spot/futures ETFs, but has a different attitude towards the ETH ETF. However, the Commodity Futures Trading Commission (CFTC) and Ethereum developer Consensys are also responsible for the SEC’s actions.
The CFTC has long considered ETH a commodity, while the SEC is considering whether to declare it a security. Meanwhile, Consensys filed a lawsuit against the SEC last month, urging the agency not to label ETH as a security.
