The U.S. Securities and Exchange Commission (SEC) may be on the verge of approving Ether exchange-traded funds (ETFs), according to a Reuters report. Sources familiar with the process indicate that the SEC has requested exchanges like Nasdaq, CBOE, and NYSE to refine their applications for spot Ether ETFs. This development, which has driven Ether's price up significantly, comes as a surprise to an industry expecting rejection.

The SEC is anticipated to decide soon on applications submitted by VanEck and ARK Investments/21Shares. Although there was initially no communication on application specifics between the SEC, exchanges, and issuers, the regulator's recent engagement suggests a shift towards potential approval. However, final approval on the ETF registration statements is still required before trading can begin, potentially delaying the launch by several months.

This move marks a significant moment for the cryptocurrency industry, particularly given the SEC's previous reluctance due to market manipulation concerns, especially under the leadership of Gary Gensler. The recent Ether ETF applications followed the SEC's approval of ETFs tied to Ether futures in October. Despite expected rejections, last year's court-mandated approval of Bitcoin ETFs for Grayscale Investments has set a precedent, with significant investor interest in new Bitcoin funds.

The approval of Ether ETFs could represent a major regulatory milestone, potentially broadening investor access to Ethereum and bolstering the cryptocurrency market.