Securities and Exchange Commission (SEC) Chair Gary Gensler announced that the development of the first spot Ether exchange-traded funds (ETFs) is advancing smoothly. Speaking at a Bloomberg conference on June 25, Gensler refrained from providing a specific launch timeline and did not confirm if the ETFs would debut before the November U.S. elections.
Gensler underscored the necessity of comprehensive disclosures by asset managers in their registration statements, which are pivotal for the ETFs’ approval and launch. “What is in front of us — and it’s done at a staff level — is what’s called the registration statements, the disclosure statements,” Gensler stated, emphasizing the importance of these disclosures for investor decision-making.
SEC Yet to Approve Form S-1s
Although the SEC approved 19b-4 filings from eight ETF applicants on May 23, the asset managers are still refining their Form S-1s, the final filings needed for SEC approval before trading can commence. Analysts speculate that the SEC might approve the funds for trading as early as the first week of July.
The U.S. crypto industry has been pushing to make digital assets a significant election issue, particularly in light of the increased enforcement actions by the SEC under Gensler’s leadership. Presidential candidate Donald Trump has promised to end what he calls President Joe Biden’s “war on crypto,” while billionaire investor Mark Cuban suggested that Gensler’s actions could significantly impact Biden’s re-election chances.
Gensler declined to discuss these political implications, instead emphasizing the clarity of existing rules governing crypto securities and the importance of compliance. “There’s nothing inconsistent about crypto securities and the securities laws… Unfortunately, there’s a number of people that are non-compliant with the laws,” he noted. Gensler further asserted that up to 20,000 crypto tokens are investment contracts or securities under U.S. law but lack proper disclosure for American investors.
Ethereum ETF Providers Update Fee and Investment Details
Several leading asset managers, including VanEck, BlackRock, Grayscale, Invesco Galaxy Digital, and Fidelity, have submitted updated proposals for Ethereum ETFs to the SEC. Eric Balchunas, an analyst at Bloomberg, noted these filings aim to provide revised information on their respective Ethereum funds.
VanEck disclosed a management fee of 0.20% for its Ethereum fund, aligning with competitors like Franklin Templeton, which charges 0.19% in management fees. Despite these developments, Andrew Kang, founder and partner at Mechanism Capital, predicted that Ether’s price could drop significantly to around $2,400 following the launch of spot ETFs. Kang believes Ether attracts less institutional interest compared to Bitcoin and that there are limited incentives for converting spot Ether into ETF form.
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