SEC's Single Vote Could Determine Future of Spot Ether ETFs
Summary:
The fate of spot Ether (ETH) exchange-traded funds (ETFs) could be decided by a single vote from Gary Gensler, the chairman of the U.S. Securities and Exchange Commission. A vote in January saw the approval of spot Bitcoin ETFs decided by a majority of one. This week, the same five SEC Commissioners will vote on the approval of VanEck's spot Ether ETF. This includes "crypto mom" Hester Pierce, critic Caroline Crenshaw, Mark Uyeda, Jaime Lizárraga, and Gary Gensler himself. A final decision on this issue could potentially reshape the landscape of the cryptocurrency industry.
The future of spot Ether (ETH) exchange-traded funds (ETFs) may hinge on a singular vote this week by Gary Gensler, United States Securities & Exchange Commission's chairman. A precedent set in January suggests this, with the endorsement of spot Bitcoin ETFs decided by a commission comprising five members. Two commissioners with pro-digital currency views, Hester Pierce and Mark Uyeda, affirmed the ETFs, whereas Commissioners Caroline Crenshaw and Jaime Lizárraga rejected them. Gensler's affirmative vote was the catalyst, many believe, for the approval of spot Bitcoin ETFs, which got the go-ahead through a 3-2 voting majority on 10th Jan 2024.
This week, the very same five SEC Commissioners are convened to vote on VanEck's spot Ether ETF on 23rd May. Below is what is known about their sentiments.
Hester Pierce, deemed the “Crypto Mom,” is a staunch believer in digital assets and their integration into the wider traditional finance network. Although she has not shared her voting position for the spot Ether ETF, she has made herself part of the Ethereum community, having addressed an audience at Colorado's ETHDenver earlier this year. She has criticized the SEC's methods of managing the cryptocurrency sector in past instances, labelling aspects of the regulator's methodology as being unconstructive and futile.
Caroline Crenshaw is a heavy critic of the crypto industry and was a vocal opposer to the spot Bitcoin ETF decision. She expressed concerns that the value of spot Bitcoin ETFs would be influenced by fraud and marketplace manipulation within the broader industry, and that by greenlighting the Bitcoin ETFs, the SEC was not safeguarding US investors. No modifications in her stance on spot crypto ETFs have been noted.
Mark Uyeda, along with Pierce, is the lone commissioner who has criticized the SEC's enforcement-based regulatory strategy toward the cryptocurrency sector. He disapproved the SEC's denial of a petition from Coinbase last December, alleging the agency acted randomly and impulsively in its denial and refusal to adapt rules to clarify oversight of the sector. Despite his concerns over the SEC's decision-making path, he voted in favor of the spot Bitcoin ETFs.
Jaime Lizárraga opposed the approval of the spot Bitcoin ETFs and kept silent post-decision. He reportedly pronounced Bitcoin's promise as a "practical alternate to traditional finance" and a "true financial inclusivity" as unfulfilled at a speech at Brooklyn Law School back in 2022. He contests the idea that SEC adopts an enforcement-based regulation approach towards the crypto industry and argues that most cryptocurrencies come under US securities laws and hence are functioning unlawfully. No significant change in his viewpoints has been observed since the spot Bitcoin ETFs got approved.
Although Gensler sanctioned spot Bitcoin ETFs in January, there's speculation that he was coaxed into doing so owing to Grayscale's successful appeal against the regulator a few months prior. It remains uncertain whether he will deal with the current raft of Ether ETF applications in a similar manner.
In addition, there could be added complications. There's an examination into Ether’s status as a potential security on the cards led by SEC Division of Enforcement's director, Gurbir Grewal. Some fund managers have made allegations that the SEC has been less approachable in dealing with spot Ether ETFs. A legal representative for one applicant, Bitwise, has reportedly stated that a few fund managers anticipate a veto from SEC this week.
Bloomberg's ETF analysts Eric Balchunas and James Seyffart predict a 25% probability that at least one spot Ether ETF is sanctioned on 23rd May. It is noteworthy that this probability has slipped from 70% since January.
Published At
5/20/2024 7:03:07 AM
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