Experts affirm that the recent approval of spot Ethereum exchange-traded funds (ETFs) by the United States Securities and Exchange Commission (SEC) is a significant indication that Ether is not classified as a security. Bloomberg ETF analyst James Seyffart, in an interview on the Bankless podcast, stated that the approval of these trust shares based on commodities confirms the SEC’s explicit recognition of Ether as a non-security. Seyffart also suggested that this recognition may extend to other tokens, solidifying their classification as commodities as well.
Digital asset lawyer Justin Browder echoed Seyffart’s sentiment, stating that if Ether ETFs receive S-1 approval, which is the final requirement for them to start trading, it would settle the debate once and for all, affirming that ETH is not a security. Adam Cochran, a partner at venture capital firm Cinneamhain Ventures, went further, suggesting that this line of thinking could be applied to tokens of other projects too. Cochran believes that many other projects have become commodities, even if they are not aware of it yet.
While the approval of spot Ether ETFs reinforces the non-security status of Ether, Seyffart and other experts anticipate that the SEC may still focus on individuals involved in staking Ether. Seyffart speculates that the SEC might distinguish between Ether itself, which they would not consider a security, and staked Ether, which could potentially fall under the definition of a security. Digital asset lawyer Joe Carlasare shares this view, suggesting that the SEC could pursue individual actors and staking-as-a-service despite the ETF launch.
It is important to note that the SEC’s approval order did not explicitly confirm Ether’s non-security status, leading finance lawyer Scott Johnsson to comment that the issue was “completely sidestepped.” However, an official statement from the SEC and its Commissioners is expected to provide more clarity in the future.
On May 23, the SEC officially approved 19b-4 applications from several companies, including VanEck, BlackRock, Fidelity, Grayscale, Franklin Templeton, ARK 21Shares, Invesco Galaxy, and Bitwise, for issuing spot Ether ETFs. However, several ETF issuers removed staking from their final amendments. Hashdex was the only issuer that did not receive regulatory approval on that day. All approved ETF issuers must await the SEC’s approval of their S-1 registration statements before launching their ETFs.
Bloomberg ETF analyst James Seyffart predicts that the S-1 approvals could be granted in a “couple of weeks,” although he acknowledges that the process may take longer, typically spanning up to five months. However, fellow Bloomberg ETF analyst Eric Balchunas believes that a mid-June launch is certainly possible.
As reported, Singapore-based QCP Capital believes that the approval of spot Ethereum ETFs in the United States could potentially trigger a substantial rally of up to 60% in the price of ETH.