Biden and Gensler Oppose FIT21 Act; ETF Issuers Amend Filings Amid Speculation Over Ether Approval
Summary:
The Financial Innovation and Technology for the 21st Century (FIT21) Act, a crypto-focused bill, faces opposition from President Biden and SEC Chairman Gensler due to insufficient investor and consumer protections. Meanwhile, speculation surrounds the approval of a spot Ether ETF following the registration of VanEck’s ETF under the ticker “ETHV” by the DTCC. Five potential spot Ether ETF issuers have also updated their filings after feedback from the SEC.
The crypto-centric Financial Innovation and Technology for the 21st Century (FIT21) Act has met with firm resistance from President Joe Biden and SEC Chairman Gary Gensler. They expressed their objections on the eve of the legislation's May 22 voting date. Speculation is rife about the impending confirmation of a spot Ether ETF, following the registration of VanEck’s ETF by the Depository Trust and Clearing Corporation under the ticker “ETHV.” The SEC has seen amendments to Ether ETF applications from a total of five issuers.
President Biden and SEC Chairman Gensler have publicly declared their opposition to the FIT21 Act set to reshape crypto regulations in the US. Citing inadequate safeguards for consumers and financial investors dealing in digital asset transactions, the White House voiced its opposition to the Act on May 22. Gensler swiftly echoed this sentiment, cautioning that the proposed legislation could create regulatory blind spots threatening the stability of the financial system.
Gensler pointed to a Chainalysis report highlighting widespread noncompliance by crypto firms, resulting in significant fraud and insolvencies. However, the same report revealed a drastic reduction in fraud-related revenue in 2023. Gensler stressed that the crypto industry's history of failures and frauds is attributable to non-adherence to rules rather than the absence or ambiguity of regulations.
Amid escalating conjecture about the potential approval of a spot Ether ETF in the US after May 23, the Depository Trust and Clearing Corporation (DTCC) has listed VanEck’s ETF under “ETHV.” The DTCC is a dominant player in America's financial market infrastructure, providing pivotal clearing, settlement, and transaction reporting services. A DTCC listing is a key step towards SEC approval. Although VanEck’s ETF is currently inactive on the DTCC website and awaits regulatory approval, it isn't the first of its kind; Franklin Templeton's spot ETH ETF was listed by the DTCC a month before.
In advance of the May 23 deadline for VanEck’s Ether application, five prospective spot Ether ETF issuers have updated their 19b-4 filings in response to last-minute SEC feedback. Amended filings from asset managers Fidelity, VanEck, and Franklin Templeton, and combined applications from Galaxy and Invesco, as well as ARK Invest and 21Shares, reaffirm recent rumors of SEC's request for final filings. Notably, both Fidelity, Franklin Templeton and ARK 21Shares excluded provisions for ETH staking. All Chicago Board Options Exchange (CBOE)-backed applicants used equivalent language. Additional reportage by Geraint Price, Sam Bourgi, and Felix Ng.
Published At
5/22/2024 10:34:14 PM
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