Congressional Representatives Encourage SEC Chair Gary Gensler to Give the Green Light to Spot ETH ETPs
Julia Smith
Published:
May 23, 2024 13:17 EDT
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Reading Time: 2 minutes
In a bipartisan effort, a group of House representatives have sent a letter to Gary Gensler, Chair of the US Securities and Exchange Commission (SEC), urging him to approve spot Ether ETPs. This comes after the House’s successful FIT21 vote on Wednesday.
The letter, signed by Representatives French Hill (R-AR), Josh Gottheimer (D-NJ), Tom Emmer (R-MN), Wiley Nickel (D-NC), and Mike Flood (R-NE), argues that approving spot ETH products would be consistent with the Commission’s standards and would ensure full protection for investors under federal securities law.
“We urge the Commission to maintain a fair and consistent approach when reviewing future applications for other digital asset-backed ETPs,” the letter states. “Specifically, the Commission should apply the same principles used in approving spot Bitcoin ETPs when evaluating pending Ether ETP applications, as the legal considerations relevant to Bitcoin also apply to Ether.”
The crypto community has eagerly awaited the SEC’s approval of spot ETH ETPs, especially after the agency approved spot Bitcoin ETPs in January.
Bloomberg ETP analyst James Seyffart estimates that there is a 75% chance of spot ETH ETPs being approved this week, given the SEC’s deadline to approve or deny Van Eck and ARK’s applications on May 23 and 24, respectively.
“Approving Bitcoin ETPs demonstrates the Commission’s commitment to protecting investors and embracing the modern financial market,” the letter continues. “These approvals will establish a solid foundation, ensuring that investor protection remains a top priority.”
The news of the congressional letter comes at a time when momentum is building for spot ETH ETPs, after months of speculation that the SEC may oppose their approval.
However, recent developments suggest that the SEC is facing criticism in Congress for its regulation-by-enforcement approach.
Earlier this month, US lawmakers voted to effectively overturn the SEC’s controversial staff accounting bulletin, SAB121, arguing that the agency failed to report the rule change to Congress.
On Wednesday, the House voted in favor of the Financial Innovation and Technology for the 21st Century Act (FIT21), which, if passed, would grant greater regulatory power over crypto to the Commodity Futures Trading Commission (CFTC).
This pushback against the SEC’s treatment of digital assets may prove beneficial in the approval of spot ETPs. Analyst Eric Balchunas believes their approval is imminent and could happen around 4 PM Thursday.
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