Bitcoin
SEC Should Treat Ethereum ETFs Like Bitcoin and Allow Trading, Lawmakers Say
House representatives from both sides of the aisle are urging the Securities and Exchange Commission (SEC) to allow exchanges to list Ether spot ETFs – applications they are expected to decide on today.
“With the Commission’s actions earlier this year, it seems a natural progression that would not only demonstrate consistency in the Commission’s application of its standards, but also affirm the legal reasoning that facilitated the spot Bitcoin ETPs decision,” read a bipartisan letter shared by Rep. French Hill (R-AR) on Thursday.
Co-signers of the letter included Hill, Tom Emmer (R-MN), Mike Flood (R-NE), Josh Gottheimer (D-NJ), and Wiley Nickel (D-NC).
The SEC was reluctant to approve Bitcoin spot ETFs, but eventually relented in January following a decisive court defeat for crypto asset manager Grayscale over the issue.
Grayscale arguments at the time were simple: the SEC had already approved Bitcoin futures ETFs, and so refusing a highly similar product like Bitcoin spot ETFs would be arbitrary and capricious, and therefore illegal.
Given that Ethereum futures ETFs have already been approved for trading, the same arguments would theoretically apply. “The Commission should apply the same principles established in approving spot Bitcoin ETPs when evaluating pending Ether ETP applications, as legal considerations pertaining to Bitcoin also apply to Ether,” the lawmakers wrote.
Lawmakers also pushed for an equitable approach to “other digital assets,” hinting at potential support for altcoin ETFs after Ether.
Until this month, most experts agreed that the SEC would not approve spot Ether ETFs before the May 23 deadline to decide on the VanEck application. However, that changed earlier this week when the SEC began helping exchanges and issuers review their 19b-4 Applications in an accelerated manner.
The sudden turn of events caused many to think the SEC’s decision was political. Earlier this month, the first crypto legislation exclusively focused on crypto banking passed both chambers of Congress with bipartisan support, despite denunciation from the White House.
On Wednesday, a bipartisan absolute majority in the House passed Hill’s FIT21 bill to bring regulatory clarity to crypto in general – with 71 Democrats voting in favor.
Eric Balchunas, ETF analyst at Bloomberg he said he expects the SEC’s ruling on Ethereum spot ETFs to be published by 4pm ET on Thursday.
Edited by Stacy Elliott.