Recently approved spot transactions Ethereum ETH
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The exchange-traded fund could launch before November, according to JPMorgan.
“We see this ETF approval as cryptocurrencies become an increasingly political issue ahead of the 2024 US presidential election, so we expect spot ETH ETF trading to begin well before November,” said Kenneth analyst at JPMorgan. said: Washington wrote in his report Friday:
The U.S. Securities and Exchange Commission (SEC) on Thursday approved the Form 19b-4s of eight spot Ethereum ETF applicants – Grayscale, Bitwise, BlackRock, VanEck, Ark 21Shares, Invesco, Fidelity and Franklin – all in one omnibus order. The ETF’s S-1 registration is still pending SEC approval for the fund to begin trading. Several analysts expect the deal to begin in the coming weeks.
The SEC’s sudden approval of the ETH ETF came as it reengaged with stakeholders earlier this week after months of stalled talks.
‘Staking controversy still remains’
The spot Ethereum ETF has likely been approved because the issuer has removed the staking reference from its Form 19b-4.
JPMorgan analysts said staking is a key issue between fund issuers and the SEC because it is unclear whether issuers staking ETH on behalf of ETF shareholders represent an investment contract and therefore a security under the Howey test.
The SEC uses the Howey test, which originated from a 1946 U.S. Supreme Court decision, to help determine whether a transaction is an investment contract and therefore subject to securities laws. According to this test, a security exists when one invests money in a joint enterprise with the reasonable expectation that he or she will benefit from the efforts of others.
“The debate over staking appears to persist, as we now understand that the focus is on whether issuers will/can retain these staking rewards,” the analysts added.
Cryptocurrency FIT 21 banknote
The approval of the ETH ETF coincidentally comes just one day after the U.S. House of Representatives passed the Financial Innovation and Technology for the 21st Century Act (FIT 21 Act).
The bill essentially gives the U.S. Commodity Futures Trading Commission jurisdiction over cryptocurrencies by identifying digital assets as “digital commodities” rather than “securities,” which are overseen by the SEC.
“However, the bill is unlikely to pass the Senate, and the Biden administration has said it does not support the bill but has not yet threatened to veto it,” JPMorgan analysts said.
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