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SEC Chairman Gary Gensler said the regulator expects to approve S-1 registration forms for ethereum spot ETF applications “sometime during the course of this summer,” which would be the final step before that the funds can be launched in the US.
Gensler confirmed that the ETFs could launch in late summer, well before the presidential election in November.
The watchdog recently approved related 19b-4 applications filed by stock exchanges in May. However, approval of individual issuers' S-1 registration forms is still pending.
Gensler said during a senate hearing on June 13 that:
“Individual issuers are still working through the registration process. That is working without problems.”
Sen. Bill Hagerty praised Gensler for committing to him that the applications would be approved by the end of the summer. He added:
“We have to get this market.”
Release schedule, product classification
Gensler's timeline aligns with predictions made by industry experts in recent weeks.
Bloomberg ETF analysts suggested that approval of S-1 documents could take “weeks” to “months” after 19b-4 approvals. Similarly, others, including JP Morgan, have predicted that ETFs will begin trading before the November election.
At this point, despite the pending S-1 approval, the introduction of ethereum spot ETFs in the US is considered inevitable. Additionally, many in the industry now consider ethereum a commodity, including legal experts, who argue that the SEC's approval of ethereum as a single-asset ETF product implies its classification as a commodity.
However, when questioned by the Senate, Gensler did not clarify whether ethereum is classified as a security or a commodity. He dodged the question and did not give a clear answer, claiming that the agency had only “partially” approved ethereum ETFs.
Meanwhile, CFTC Chairman Rostin Behnam very clearly told the Senate that ethereum was a commodity and should be overseen by his agency.
Budget stipulation concerns
Gensler also addressed the SEC's fiscal year 2025 budget request, highlighting significant growth and changes in the markets. He said:
“Our limited resources belie the tremendous growth and change in our markets.”
He added that the SEC currently supervises approximately 40,000 entities, including more than 13,000 registered funds, 15,400 investment advisors and 3,300 broker-dealers.
Gensler raised concerns about a provision in the agency's fiscal year 2025 funding bill by the House Appropriations Committee, which restricts the use of funds for enforcement actions related to digital asset transactions, except in case of fraud or market manipulation.
Gensler said:
“This would seriously undermine our efforts. While not all cryptocurrencies are cryptographic securities…those that are have an obligation to disclose full, fair and complete information to the public.”
The SEC Chairman highlighted the agency's critical role in maintaining market integrity and protecting investors. He also emphasized the importance of having adequate financing to keep pace with rapidly evolving markets and technological advancements.
He told the Senate:
“The SEC is the policeman that polices the investing public and the issuers.”
