The cryptocurrency world is anxiously awaiting the following decision: Ethereum Spot Exchange Traded Fund (ETF) There has been a lot of talk at the U.S. Securities and Exchange Commission (SEC) about variables that could affect the Commission’s rulings.
Author and financial lawyer Scott Johnsson joins the discussion to highlight important points. The SEC may consider Ethereum’s security posture when deciding on exchange products in the coming days, especially May 31.
Ethereum security questions cause approval hurdles
at postScott Johnsson writes in several articles highlighting the question of whether Nasdaq Stock Market LLC (“Nasdaq” or the “Exchange”) properly filed an offering to list and trade the shares of the iShares Ethereum Trust pursuant to Nasdaq Rule 5711(d). I shared some screenshots. Commodity-based trust shares, taking into account the nature of the underlying assets held by the trust.
The definition of commodity-based trust shares as securities raises the question of whether the SEC may classify them as: ETH This is a security that poses a potential obstacle to the spot ETH ETF.
Johnsson believes this is likely to be discussed publicly, but he believes this is formal evidence that the SEC is considering security concerns for ETH in its impending spot ETF ruling. Because this question has never been asked when considering the same product for Bitcoin, the largest cryptocurrency asset.
Here is the post:
I know this is widely considered a possibility, but this is your official notice that the SEC is considering security concerns for ETH in the upcoming spot ETF order. This question has (AFAICT) never been asked in relation to the Spot/Futures BTC ETF product.
According to the attorney, 15 USC 78s(b)(2)(B) requires the SEC to provide notice of the grounds for the denial it is considering. Although the above question has never been asked or observed before, Bitcoin Spot ETF During the submission process, this issue was raised for all ETH spot ETFs submitted to the Request for Comments (RFC).
According to Johnsson, the SEC’s clear goal in raising this question is to reject Ethereum spot ETFs on the grounds that they are ineligible for filing if they hold securities and were incorrectly filed as commodity-based trust shares.
Johnsson sees his insights as a potential cause for SEC action in the broader cryptocurrency space, but says there may be more to the development than the community knows.
Final Reviewable Agency Action
Before the May 31 deadline, Johnson opinion The SEC will likely provide at least a 30-page analysis covering whether the Ethereum spot ETF complies with Exchange Act regulations. Therefore, this will be the last agency action available for review before the deadline.
Moreover, they will have to go beyond the framework they established to authorize Bitcoin futures and spot products under the Securities Act of 1933 and the restrictions imposed after the D.C. Circuit’s GBTC ruling.
Johnsson believes there are a number of options available to regulatory watchdogs, each of which will have far-reaching consequences.
Featured image from iStock, chart from Tradingview.com