A group of bipartisan House representatives urged the US Securities and Exchange Commission (SEC) Chair Gary Gensler in a May 22 letter to approve spot Ether ETPs following the House’s successful FIT21 vote on Wednesday.
Signed by Reps. French Hill (R-AR), Josh Gottheimer (D-NJ), Tom Emmer (R-MN), Wiley Nickel (D-NC), and Mike Flood (R-NE), Wednesday’s letter argued that the approval of spot ETH products would “demonstrate consistency with the Commission’s application of its standards” while “ensuring the full protection of the federal securities law for investors.”
Congressman Push Gary Gensler To Approve Spot ETH ETP
“We urge the Commission to maintain a consistent and equitable approach when reviewing upcoming applications for other digital asset-backed ETPs,” the letter stated. “Specifically, the Commission should apply the same principles set forth in the approval of the spot Bitcoin ETPs as it evaluates the pending Ether ETP applications as the legal considerations pertinent to Bitcoin also apply to Ether.”
Crypto community members have long waited for the SEC’s approval of spot ETH ETPs, particularly following the federal agency’s approval of spot Bitcoin ETPs in January.
Things are taking a turn for the better on Spot #ethereum ETF approvals this week. Upping our odds to 75%. https://t.co/3WJ8kx9d8k
— James Seyffart (@JSeyff) May 20, 2024
According to Bloomberg ETP analyst James Seyffart, the odds of spot ETH ETP being approved this week is approximately 75%, given the SEC deadline of approving or denying Van Eck and ARK’s on May 23 and 24, respectively.
“Approving Bitcoin ETPs demonstrates the Commission’s fidelity to its mission to protect investors as well as the need to embrace the modern financial market,” the letter continued. “These approvals will set a strong foundation, ensuring that investor protection remains paramount.”
Crypto Regulatory Momentum Builds Amid SEC Pushback
News of the congressmen’s letter comes amid increasing momentum for spot ETH ETPs after months of speculation that the federal regulator may push back against their approval.
Based on recent developments, however, it seems the SEC is facing backlash in Congress for its regulation-by-enforcement approach.
My best guess is we hear from the SEC around 4pm tomorrow. For spot btc they dropped it at 3:45pm, some others in past were slightly after 4pm. Anything poss tho https://t.co/MzTOcsmTnJ
— Eric Balchunas (@EricBalchunas) May 22, 2024
Earlier this month, U.S. lawmakers voted to effectively overturn the federal agency’s controversial staff accounting bulletin, SAB121, on grounds that the SEC failed to report the rule change to Congress.
On Wednesday, the House voted to approve the Financial Innovation and Technology for the 21st Century Act (FIT21), which would ultimately delegate greater crypto regulatory power to the Commodity Futures Trading Commission (CFTC) if passed.
The legislative pushback on the SEC’s treatment of digital assets may prove beneficial in spot ETP approval, with analyst Eric Balchunas believing their approval is imminent and may very well happen around 4 PM Thursday.