- The SEC has asked exchanges to update their 19b-4 filings for potential spot Ethereum ETFs on an “accelerated basis”
- This request has surprised many who thought the SEC would reject an Ethereum ETF, although it is not certain
- The move has resulted in a 20% jump in the price of ETH
The US Securities and Exchange Commission (SEC) yesterday appeared to take a step closer to approving an Ethereum ETF when it asked exchanges that plan to list it to update a key document. Both Coindesk and the Wall Street Journal reported that the exchanges in question are being asked to update their 19b-4 filings on an “accelerated basis” for potential spot Ethereum ETFs. The move, which resulted in a 20% jump in the price of ETH, surprised many who believed that the SEC would reject an Ethereum ETF based on its perceived belief that ETH is a security.
SEC to Take a Closer Look at Ethereum ETF
Several high-profile institutions, among them Blackrock, have filed for Ethereum ETFs, but their success was thought to be less plausible than a Bitcoin ETF given the fact SEC Chair Gary Gensler has talked up Ethereum being a security. However, the request for would-be Ethereum ETF hosts to update their 19b-4 filings on an accelerated basis has got tongues wagging over a potentially favorable decision.
A 19b-4 filing is a formal submission made by self-regulatory organizations (SROs) such as stock exchanges to the SEC to propose changes to their rules, including the creation of new rules or amendments to existing ones. These filings allow the SEC to review and approve or disapprove the proposed changes to ensure they comply with the Securities Exchange Act of 1934 and protect investors.
When it comes to the approval of an Ethereum ETF, updated 19b-4 filings would enable the SEC to evaluate whether the proposed ETF meets regulatory requirements, ensuring investor protection and market integrity. The SEC uses these filings to assess the ETF’s transparency, the measures in place to prevent fraud and manipulation, and the strategies for maintaining liquidity and price stability.
Experts Increase Approval Odds
By thoroughly reviewing these filings, the SEC ensures that any approved ETF operates fairly and transparently, fostering trust and stability in the financial markets. The process involves public comments and a comprehensive review, ultimately allowing the SEC to approve, disapprove, or request modifications to the ETF proposal.
News of the SEC’s request led to ETF experts upgrading their odds of an Ethereum ETF approval, with the tone upbeat but a warning note sounded over the timeframe:
That said, if we’re correct and we see these theoretical approvals later this week. It *should* mean that S-1 approvals are a matter of ‘When’ not ‘If’…
— James Seyffart (@JSeyff) May 20, 2024
ETH holders didn’t mind, however, as their holdings increased by 20% as ETH bounced from $3,140 to $3,700.
