Securities and Exchange Commission (SEC) chair Gary Gensler recently provided insight into the state of Ethereum (ETH) exchange-traded funds (ETFs) during a Senate Appropriations Committee meeting. The discussion came after Tennessee Senator Bill Haggerty raised concerns about the delay in approving the ETFs and criticized the SEC for not establishing clear guidelines for the crypto industry.
Gensler indicated that the approval of the ETFs is on the horizon, stating that they are expected to be approved sometime this summer, potentially within the next three months, by September. This follows the recent approval of 19b-4 filings from eight firms by the SEC, paving the way for the availability of ETH ETFs. The next phase involves SEC staff reviewing and overseeing the S-1 approvals.
During the meeting, Gensler was asked whether he considered ETH to be a commodity now that ETF approvals are imminent. Instead of providing a direct answer, he focused on the upcoming approvals of the ETFs within the next three months. In contrast, Chair of the Commodity Futures Trading Commission (CFTC), Rostin Behnam, unequivocally stated that ETH is indeed a commodity.
Gensler reiterated his belief that most cryptocurrencies are securities and emphasized the importance of projects behind these tokens registering them as securities with the SEC to comply with securities laws. He emphasized the need for transparency, stating, “While not all crypto are crypto securities – some are under Chair Behnam’s jurisdiction – those that are have an obligation to disclose to the public.”
Both Gensler and Behnam acknowledged that the CFTC currently lacks the necessary tools, funding, and overarching authority to effectively regulate the crypto markets. Behnam highlighted the absence of traditional regulatory mechanisms such as registration, custody, surveillance, and oversight, which have historically strengthened American capital and derivative markets.
The discussion around the approval of ETH ETFs and the classification of cryptocurrencies as securities or commodities highlights the evolving regulatory landscape surrounding digital assets. As the SEC and CFTC navigate the complexities of regulating the crypto industry, market participants and investors await further developments in the coming months.
