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Once again the United States Securities and Exchange Commission (SEC) has come under fire for stifling innovation, with the strict regulator blasted for ‘confusing behaviour’ surrounding Ethereum regulation amid market demand for a spot Ethereum ETF (ETH ETF).
Not only has the agency been losing court cases in the United States, but after dragging its heels for years over fair crypto regulation, the past year has seen the SEC accused of trying to “regulate by enforcement”.
Now, recent comments from a former Commodity Futures Trading Commission (CFTC) commissioner seem to be heating-up the debate, especially surrounding the long-awaited and highly-anticipated prospect of a spot Ethereum ETF this year after the SEC approved BTC ETFs in January.
SEC Decision On ETH ETF Is “Harming The Public”
Taking to X, now iconic champion of crypto regulation – Brian Quintenz, the former CFTC commissioner and the current Head of Policy at a16z crypto, thinks the way the regulator is handling Ethereum regulation is not only “confusing” but “actively harming the public.”
Even after pressure, Gary Gensler, the SEC Chairman, has failed to declare its position on Ethereum regulation publicly, despite the agency green-lighting effective Bitcoin regulations. And the lack of clarity on Ethereum regulation, especially key questions such as “Is Ethereum an Security?” appears to be worsening his position.
Interestingly, while the Commission might be delaying its pronouncement, causing “confusion,” as Quintenz says, it has approved Ethereum exchange-traded funds (ETFs) for the Futures market – this product can be traded on the Cboe.
Although it is not similar to the “spot” version that the SEC approved for Bitcoin in January 2024, analysts maintain that their approval implies that ETH, like Bitcoin, is not a security.
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Quintenz added that if the SEC thought ETH was a security, it would not have approved the Ethereum Futures ETF – he explained that such products fall under a different regulatory framework. They cannot be listed on national bourses like Nasdaq, Cboe, or CME.
The Bottom Line: Optimism For Spot Ethereum ETFs
For this reason, most supporters hope the same agency will approve spot Ethereum ETFs – especially with major players like BlackRock and Fidelity among applicants.
All eyes now look forward to the upcoming deadline for the SEC’s decision, in late May 2024, to rule on these spot Ethereum ETF applications.
However, while optimism abounds, there could be setbacks – the latest news on March 20 shows that the Ethereum Foundation is being investigated by an unnamed “state authority” – the foundation promotes the adoption of the smart contracts platform.
Analysts are linking this investigation with the ongoing debate on how the SEC should classify Ethereum.
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Disclaimer: Crypto is a high-risk asset class. This article is provided for informational purposes and does not constitute investment advice. You could lose all of your capital.
