US Legislators Ask SEC Chief to Approve Spot Ether ETF
Lawmakers in the United States have asked SEC chief Gary Gensler to approve the spot Ethereum ETF applications. As per the stakeholders, an ETH ETF will enable investors to access ETH in a regulated and more secure format.
Investors Want Spot Ethereum ETF
The request was generated at a time when the demand and expectation of a spot ETH ETF approval has continued to grow among investors.
To this end, House lawmakers have urged the regulatory agency to approve the new investment vehicle. On this account, the bipartisan group of legislators including noteworthy digital asset advocates such as Representative Tom Emmer, Josh Gotteheimer have penned down a letter to SEC on 22nd May 2024. This application asked the head of the regulatory agency to approve the ETH ETF application.
Lawmakers have retained that the potential for a spot Ethereum ETF is going to allow investors to access ETH in a more regulated and secure manner. The letter noticed that the regulatory agency should use the same principles in the approval of spot Bitcoin ETPs in its assessment and treatment of Ethereum ETF applications for spot reserves.
The letter also mentioned legal considerations associated with Bitcoin to reflect on Ethereum in the similar light.
The Potential of the Ethereum ETF Application
Eric Balchunas, the ETF analyst for Bloomberg, shared the letter on the social media platform X. He highlighted that the letter dealt with the issue of ETFs based on miscellaneous digital assets but refrained from making any clarifications sans Ethereum.
He noticed that it is interesting that the letter used the word other ETFs but only mentioned Ethereum. He further stated that it is going to be interesting to watch the quick escalation of the ETF industry.
The analyst also stated that legislators continue to test the SEC’s legal obligations and file different types of digital assets to push the proverbial legal envelop with the regulator.
The letter was written at a time when the crypto sector has increased the speculation about the potential approval of an Ethereum ETF approval before the month end. The community seems to have grown more optimistic about the potential listing of an Ethereum ETF after lawmakers taking a proactive approach to demand it.
Another group of US legislators including House Financial Services Committee chairperson Patrick MeHenry and Bill Huizenga, the head of sub-committee discussed Prometheum. The legislators expressed reservations about SEC’s classification of Ethereum as a security rather than commodity.
Meanwhile, Hong Kong regulators are looking to allow applicants to keep ETH staking options for spot ETF filings. The regulators in Asia have approved and listed Ethereum ETFs as soon as 30th April 2024. On the other hand, the United States introduced spot Bitcoin ETFs in January 2024 and now is working on Ethereum ETFs.
Hong Kong Regulators to Allow Staking Option for Spot Ethereum ETFs
In contrast to regulators in the United States, the regulatory agency of Hong Kong has allowed institutions to retain staking options for their spot Ethereum ETFs.
As per the regulatory guidelines issued by the Securities and Futures Commission (SFC) issuers may offer staking options on regulated trading platforms. A Bloomberg report on the subject indicates that Hong Kong officials are still considering the option to keep or discard ETH staking.
After a three-months deliberation period, SFC has continued to organize meetings and have talks with relevant stakeholders on the topic. The regulated trading platform has also kept the floor open to receive new ETF applications.
Bloomberg revealed that the regulators are still in the process of discussing the matter but are yet to issue an implementation date. However, the stance of SFC is unlike SEC which views staking option as an investment contract and violation of security laws.
To ensure regulatory compliance, ETF applicants in the USA have amended their applications to discard the ETH staking option. Last year, SEC classified staking as a security option during its lawsuit against Kraken which led the firm to shut down staking service options in the USA.
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