Ether ETF Approved Without Gensler’s Vote — Here’s Why

On May 23, the United States Securities and Exchange Commission (SEC) granted approval for the spot Ether exchange-traded fund (ETF). This approval process differed somewhat from the spot Bitcoin ETF approval that took place in January. Whereas the spot Bitcoin ETF was sanctioned through a vote by a five-member committee, which included SEC chief Gary Gensler, the spot Ether ETF received approval from the SEC’s Division of Trading and Markets.

The SEC’s endorsement covered the 19b-4 form submissions from companies like BlackRock, Fidelity, Grayscale, Bitwise, VanEck, Ark, Invesco Galaxy, and Franklin Templeton. Despite the approval being formalized, the SEC made no comments beyond the official announcement. The official document simply stated: “For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.”

Intriguingly, this variation in the approval processes for the two crypto ETFs sparked curiosity within the crypto community. Bloomberg’s ETF analyst James Seyffart described this procedural difference as a “norm.” According to Seyffart, many approvals go through similar processes, and requiring “an official vote for every decision or document” would be overwhelming and impractical for the commission. Seyffart added that it might have been interesting to see the political dynamics in play.

Despite Seyffart’s reasoning, there are skeptics of his viewpoint. One user on X highlighted that the commissioners have a 10-day window to challenge the decision and suggested that the delegated authority was used to obscure the votes due to political sensitivity. There’s also speculation that factors like political pressure, forthcoming elections, and the introduction of ESG (Environmental, Social, and Governance) rules may have influenced the SEC’s decision-making.

Another distinctive difference between the two crypto ETF approvals lies in their market debut. While all 11 Bitcoin ETFs began trading the day after receiving approval, supported by S-1 clearance, the trading of the Ether ETF might encounter delays. It could take several weeks or even months for the ETH ETF to debut on the stock exchange, given that the ETF filers have not yet obtained the necessary S-1 SEC registration.

These delays in the Ether ETF’s trade start date have led to various interpretations about the SEC’s strategic considerations. Some analysts argue that the delays could be a means to manage market stability. Others propose that the delays might be influenced by the need to navigate complex regulatory landscapes or to meet specific compliance criteria.

While the crypto community continues to monitor these developments, it is clear that the SEC’s decision-making process is intricate and subject to various influencing factors. The approval of crypto ETFs, whether for Bitcoin or Ether, remains a closely watched event with far-reaching implications for the market.

The SEC’s recent approval of the spot Ether ETF underscores both the commission’s evolving approach to crypto assets and the complex mechanics of regulatory approval processes. As the market awaits the trading debut of the Ether ETF, the differences in approval and launch strategies between the Ether and Bitcoin ETFs offer valuable insights into the SEC’s regulatory framework and market strategy.