The recent approval of spot Ethereum exchange-traded funds (ETFs) by the SEC potentially confirms Ether’s status as a non-security, according to industry experts. Bloomberg ETF analyst James Seyffart emphasized that this approval implies that the SEC recognizes Ether as not being a security, solidifying its classification as a commodity. Digital asset lawyer Justin Browder also stated that if Ether ETFs receive S-1 approval, it would settle the debate once and for all, affirming that ETH is indeed not a security. Adam Cochran, a partner at venture capital firm Cinneamhain Ventures, suggested that this line of thinking could be applied to tokens of other projects as well, further reinforcing the non-security status of Ether.
While the approval of spot Ether ETFs reinforces the non-security status of Ether, experts anticipate that the SEC may still focus on actors involved with staking Ether. Seyffart speculates that the SEC might distinguish between Ether itself, which they would not consider a security, and staked Ether, which could potentially fall under the definition of a security. Digital asset lawyer Joe Carlasare shares this view, suggesting that the SEC could pursue individual actors and staking-as-a-service despite the ETF launch. The SEC’s approval order did not explicitly confirm Ether’s non-security status, leading finance lawyer Scott Johnsson to comment that the issue was “completely sidestepped.” An official statement from the SEC and its Commissioners is expected to provide more clarity in the future.
On May 23, the SEC officially approved 19b-4 applications from various ETF issuers for issuing spot Ether ETFs, including VanEck, BlackRock, Fidelity, Grayscale, Franklin Templeton, ARK 21Shares, Invesco Galaxy, and Bitwise. Several ETF issuers removed staking from their final amendments, with Hashdex being the only issuer that did not receive regulatory approval on that day. All approved ETF issuers must await the SEC’s approval of their S-1 registration statements before launching their ETFs. Bloomberg ETF analyst James Seyffart predicts that the S-1 approvals could be granted in a “couple of weeks,” although the process may take longer, typically spanning up to five months. However, fellow Bloomberg ETF analyst Eric Balchunas believes that a mid-June launch is certainly possible.
The approval of spot Ethereum ETFs in the United States could potentially trigger a substantial rally of up to 60% in the price of ETH, according to Singapore-based QCP Capital. The approval of these commodity-based trust shares reinforces the recognition of Ether as a commodity, strengthening its classification as a non-security. Experts believe that the approval of these ETFs settles the debate regarding the status of ETH once and for all, affirming that it is indeed not a security. While the SEC may still focus on actors involved with staking Ether, the official statement from the SEC and its Commissioners in the future is expected to provide more clarity on the matter. With the approval of spot Ether ETFs and the anticipation of S-1 approvals, the future of Ether as a non-security commodity seems more certain than ever.
