19h30 ▪
5
min of reading ▪ by
Evans S.
The crypto sphere is buzzing as the SEC is set to make a pivotal decision regarding an Ethereum ETF this week. Nate Geraci, president of the ETF Store, recently stated that the SEC will evaluate a spot Ethereum ETF, a decision that could have major implications for the adoption and regulation of this cryptocurrency. Let’s explore the details of this decision and its potential implications.
The Approval Process: 19b-4 and S-1
To launch an Ethereum ETF, the SEC must approve two essential elements: the 19b-4 and the S-1. The 19b-4 are filings submitted by national securities exchanges when they wish to amend their rules or introduce new products.
In this context, it means that platforms like the NYSE or the Nasdaq are seeking permission to add Ethereum ETFs to their offerings. This approval is crucial as it would allow investors to buy and sell ETFs of this crypto in the same way as ordinary stocks.
The S-1, on the other hand, are initial registration statements necessary for new securities offered to the public. These documents provide the SEC and investors with detailed information about the fund’s structure, management, and how it aims to replicate the performance of the ETH crypto. Without S-1 approval, the ETFs cannot be legally marketed to investors. Even with 19b-4 approval, this restriction persists.
The SEC’s decision-making process is meticulous and can take several months. The Commission has a legal deadline of 45 days to make an initial decision on a 19b-4 filing. This period can extend up to 240 days. This time allows the SEC to deeply evaluate the proposals and ensure they meet all necessary regulations.
Challenges and Risks
Even if the SEC approves the 19b-4, it is possible that it will slow down the approvals of the S-1, especially considering the lack of participation observed so far. This dilatory tactic could indicate a cautious approach by the SEC, reflecting concerns about the complexity and risks associated with cryptocurrencies.
The slow pace of approvals also reflects an attempt by the SEC to better understand the crypto market…
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