The Securities and Exchange Commission (SEC) has been a topic of speculation within the crypto community regarding the approval of a Bitcoin (BTC) exchange-traded fund (ETF). The question has always been when the SEC will approve it and what reasons they will find to reject the applications. However, in January 2024, a significant development occurred with the approval of nine spot BTC ETFs, driven by a precedent-setting decision from the Court of Appeals. This marked the next stage in institutional adoption and legal recognition for Bitcoin. Now, attention has turned to Ethereum (ETH), the world’s second-largest cryptocurrency, and the possibility of a similar fund.
Multiple major issuers have submitted their applications for an ETH ETF, but recent reports suggest that it is unlikely any will be approved in May, according to a meeting with the regulator. While the final decision is not yet guaranteed, it aligns with earlier predictions. On April 9, Jan van Eck, the CEO of VanEck, expressed his belief that the SEC would reject the proposed Ethereum ETFs. However, the companies plan to file additional disclosure paperwork in the hopes of keeping the discussions alive.
The SEC has followed a pattern of continuous postponements, as seen with pending BTC ETFs. On April 23, the regulator announced that the decision date for Franklin Templeton’s application would be moved to June 11, and Grayscale’s to June 23. The decision on VanEck’s spot Ethereum ETF application, which is next in line, has also been postponed to May 23.
In addition to these developments, the SEC has faced criticism from the crypto community for being heavy-handed, unfair, and misrepresenting the industry. A Utah judge, Judge Robert Shelby, seemingly agreed with these criticisms in a March ruling. He sanctioned the Commission over its handling of a case against DEBT Box, citing a lack of evidence, misrepresentation, and false statements. This ruling led to the resignation of two agency lawyers, Michael Welsh and Joseph Watkins, who allegedly received warnings of termination if they did not resign.
