KEY POINTS
- Gensler said the Grayscale challenge last year affected the SEC's decision for spot Bitcoin ETFs
- Regarding the timeline for spot ETH ETFs, he said 'it's really up to' the applicants
- Earlier reports revealed the SEC had been 'radio' silent and meetings with applicants were 'one-sided'
The approval of 19b-4 filings for spot Ether (ETH) exchange-traded funds (ETFs) has livened up the cryptocurrency community that was in a lull after the Bitcoin halving in April. However, the funds won't go live until S-1 filings are approved, and Securities and Exchange Commission (SEC) Chair Gary Gensler said the timeline will be up to the applicants.
These registrants are self-motivated to be responsive to the comments they get, but it's really up to them how responsive they are," Gensler said when asked for a more specific timeline on the approval of issuers' applications. He did not provide an answer when pressed by Reuters regarding how long the process of approvals will take.
Gensler went on to reiterate that he still deems the digital assets space as "rife with fraud and scams and conflicts," remarks he has repeatedly stated since leading the Wall Street regulator.
On the approval of spot Bitcoin ETFs in January, Gensler said Grayscale Investments' challenge affected the decision. Grayscale, which has its own BTC ETF, argued at the time that the regulatory agency should approve the funds since it gave the green light to Bitcoin futures ETFs whose prices correlate with spot prices.
Gensler's latest remarks about the approval of spot ETH ETFs seem to contradict earlier reports that meetings between SEC staff and applying issuers were largely "one-sided," with the regulator's staff only listening to applicants without providing comments on the proposed funds.
At the time, several applicants were reportedly led to believe that the regulatory agency would ultimately reject their proposals. Senior Bloomberg analyst Eric Balchunas said late in April that there was "radio silence" from the SEC.
Earlier in April, applying issuers VanEck and CoinShares expressed pessimism over the approval of spot Ethereum ETFs. VanEck CEO Jan van Eck said back then that "pins are dropping as far as Ethereum is concerned," seemingly confirming reports that the SEC has not been communicating well with applicants.
Two weeks ago, at least five spot ETH ETF applicants amended their filings after reports emerged that the SEC suddenly issued comments on the proposed funds. Days later, the regulator approved the filings of exchanges.
Meanwhile, the issue regarding Ether's status as a commodity or a security remains unclear even with the regulator's sudden shift. Will Cai, Head of Indices at crypto data solutions firm Kaiko Research, said the approvals only mean "the SEC implicitly stated that ETH (without staking) is a commodity rather than a security."
Gensler has yet to address the matter, which he has repeatedly refused to clarify in past interviews and during a Congress hearing last year.
