The U.S. Securities and Exchange Commission’s approval of Ethereum futures ETFs last year is seen as an implicit acceptance of Ether as a commodity, paving the way for a potential spot ETF this year, says Bloomberg ETF analyst James Seyffart. Despite the SEC’s reluctance to explicitly classify Ethereum, Seyffart points to the CFTC’s classification and the approval of Ethereum futures ETFs as indications of Ether’s commodity status.
SEC’s Implicit Acceptance
The SEC’s approval of Ethereum futures ETFs in October 2023 without challenging its classification as a commodity signals implicit acceptance, according to Seyffart. The CFTC’s clear identification of Ethereum as a commodity aligns with the SEC’s actions, potentially setting the stage for a spot ETF.
The distinction between securities and commodities ETFs carries legal and regulatory implications. Seyffart notes that calling Ethereum a security would not only contradict the CFTC but could lead to legal challenges, potentially requiring the SEC to unlist futures ETFs.
Potential Ethereum ETFs Approval
Seyffart anticipates potential approval for Ethereum ETFs in 2024, considering the SEC’s position and the legal complexities involved. The classification decision holds significance as it impacts taxes, regulatory burdens, and the SEC’s stance on cryptocurrency investments.
Legal Precedent and SEC’s Position
Drawing attention to a recent court case where the SEC exempted a stock volatility index from security futures, Seyffart highlights the precedent and its relevance to Ethereum’s classification. The SEC’s final decision on spot Bitcoin ETFs is awaited, with Seyffart predicting approval by January 10.
Upcoming Decision Deadlines
Several decision deadlines, including those for spot Ether ETFs from VanEck, ARK 21Shares, and Hashdex, loom ahead. The SEC faces critical choices that could shape the regulatory landscape for cryptocurrency investments, impacting potential flows of billions into ETFs.
The evolving regulatory landscape surrounding Ether and potential ETFs hinges on the SEC’s implicit acceptance of Ethereum as a commodity. Seyffart’s analysis points to the complex legal considerations and potential developments in the coming months.