- The SEC must approve both the Spot Ethereum ETF's 19b-4 application and S-1 registration statement before it can begin trading on a stock exchange.
- Form S-1 is the first registration document disclosing detailed information about a new security offered to the public.
Financial markets are tingling SEC decision Ethereum ETF spots will be announced. This decision potentially marks an important milestone in the integration of digital assets and traditional financial markets. For the Spot Ethereum ETF to start trading on the stock exchange, SEC must approve Both the 19b-4 application and the S-1 registration statement. Rule 19b-4 includes the necessary changes and introduction of new products that exchanges such as Nasdaq propose to the SEC. This step is very important as it allows exchanges to list these new Ethereum products.
The SEC's decision on spot ETFs is due this week…
The SEC must approve both a 19b-4 (change in exchange rules) and an S-1 (registration statement) in order to launch an ETF.
It is technically possible for the SEC to approve 19b-4 and then slow-play S-1 (especially given the reported lack of engagement here).
— Nate Geraci (@NateGeraci) May 19, 2024
Form S-1 is the first registration document disclosing detailed information about a new security offered to the public. This document clearly outlines the Ethereum ETF structure, management, and strategies for achieving Ethereum performance. Within the SEC's jurisdiction, an ETF cannot be legally sold to investors without approval of both filings.
Despite high expectations,Reservations regarding delays. The SEC approves 19b-4 filings, but S-1 approvals may be delayed. Pursuant to that mandate, the SEC has 45 days before making an initial decision on her 19b-4 filing, with a flexible limit of 240 days. Review of S-1 applications may be delayed due to the perceived complex nature and risks associated with virtual currency products. The lack of engagement between issuers and the SEC points to the need for careful regulatory review. The SEC's concerns about the stability and security of cryptocurrencies are reflected in its rigorous review process, which may result in delays.
Committee members' positions and expectations
Hester Peirce, Mark Ueda, Caroline Crenshaw, Jaime Lizarraga and Gary Gensler are the current SEC commissioners. Both commissioners have consistently criticized the SEC's crypto policies and advocated for a more open approach. Peirce, a key regulator known as “crypto mom,” is involved in Ethereum and has indicated she may support an Ether ETF.
Commissioner Crenshaw, by comparison, is an ardent critic of the crypto sector. Due to her concerns for investor protection, she remains firmly opposed to approving Bitcoin ETFs. Mr. Lizarraga’s vote against Bitcoin ETFs signals a long-term stance that goes against public opinion without any basis.
Gary Gensler's vote is expected to be the deciding factor. Gensler voted in favor of approving a Spot Bitcoin ETF in January, a move many believe was a result of Grayscale's successful appeal to the SEC. This unpredictability adds further uncertainty to Ether ETF decisions.
What this decision means
The immediate decision on the Ether ETF will have far-reaching implications for the crypto market and regulatory framework. Once cleared, there could be widespread acceptance and investment in Ether, which could drive its price and adoption. This action marks a shift by the SEC to a more open approach to crypto ETFs, and could have global regulatory implications. Ethereum partially rebounded as the decision deadline approached, with the price recently rising to $3,100.
