Key Points
As the crypto world eagerly awaits the possible sanction of a spot Ether (ETH) exchange-traded fund (ETF) in the US, House lawmakers are advocating for the securities regulator to greenlight the new product.
A cross-party group of House lawmakers, including majority whip Tom Emmer and Democrat Josh Gottheimer, penned a letter to SEC Chair Gary Gensler on May 22, requesting the SEC to approve spot Ether ETFs.
Lawmakers Advocate for Spot Ether ETFs
The legislators contended that a prospective spot Ether ETF would provide investors with a more regulated and secure means to access ETH.
“We urge the Commission to maintain a consistent and equitable approach when reviewing upcoming applications for other digital asset-backed ETFs,” the lawmakers stated in the letter.
They further added that the Commission should apply the same principles used in the approval of spot Bitcoin ETPs when evaluating pending Ether ETF applications, as the legal considerations pertinent to Bitcoin are also applicable to Ether.
Bloomberg ETF analyst Eric Balchunas shared news of the letter on an unspecified platform on May 23.
He highlighted that the letter referred to ETFs based on “other digital assets,” but did not specify any apart from Ether.
“It is interesting to me that they say ‘other digital assets’ vs only mentioning Ether. Will be interesting to see how far and how quickly the ETF industry pushes the envelope,” Balchunas commented.
He further added that it would not be surprising if the lawmakers would “pounce on SEC vulnerability and file all kinds of coins” to test the limits.
As the month-end approaches, the crypto community is growing more optimistic about the potential approval of an Ethereum ETF, as US lawmakers continue to push the SEC to approve a spot ETH ETF.
On May 22, another group of lawmakers, including chairman of the House Financial Services Committee Patrick McHenry and subcommittee heads Bill Huizenga, demanded the SEC provide records related to the custody services provider Prometheum.
They also expressed dissatisfaction with the SEC’s response to a previous inquiry on Ether’s classification as a security rather than a commodity.
Meanwhile, Hong Kong regulators are reportedly exploring the possibility of allowing staking for spot Ether ETFs, which commenced trading on April 30, 2024, alongside spot Bitcoin (BTC) ETFs.
On the contrary, the U.S. introduced spot Bitcoin ETFs in January 2024 but has yet to approve a spot Ether ETF.
