The Securities and Exchange Commission has given its approval to applications from Nasdaq, CBOE, and NYSE to list exchange-traded funds linked to the price of ether. This development could potentially lead to the trading of these products starting later this year.
US SEC Approved Ether ETFs Exchange Application
Thursday's approval came as a major surprise for ETF issuers and the cryptocurrency industry. Until Monday, there was an expectation that the SEC would reject the filings. This unexpected win is a significant development for these firms.
Several issuers, including VanEck, ARK Investments/21Shares, and BlackRock, are planning to introduce ETFs linked to the second-largest cryptocurrency. This comes after the SEC's approval of bitcoin ETFs in January, which was a significant milestone for the industry.
The exchanges successfully obtained SEC approval for a rule change necessary to list these new products.
Nevertheless, there will be a delay in trading commencement, as issuers are still awaiting approval from the SEC for individual ETF registration statements that outline investor disclosures. Industry participants have expressed uncertainty regarding the duration of the SEC's approval process, as reported by Reuters.
SEC's spokeperson stated that the agency has no further comment apart from the official order that approves the products.
A spokesperson for 21Shares, a company involved in the Ether investment product, expressed enthusiasm for the current developments in the industry.
Critics Lambast SEC's Decision
However, some industry critics have expressed concerns about the approval, viewing it as a potentially risky development that could lead to increased investment in a highly unpredictable market.
According to a statement from Benjamin Schiffrin of Better Markets, a nonprofit advocating for stricter financial regulations, the SEC did not fulfill its duty to protect investors and the markets.
Provided by well-established financial services firms, ETFs are essentially collections of assets. Instead of purchasing the assets individually, customers can buy shares in these collections.
These products are widely traded through brokerage accounts offered by companies such as Vanguard or Charles Schwab, making them a favored choice among wealth advisers and financial managers.
For years, proponents of cryptocurrencies have viewed these products as a promising means to promote broader adoption of digital currencies. Prior to the approval of Bitcoin E.T.F.s, crypto companies engaged in legal battles with the SEC, ultimately achieving a legal victory in August. This victory compelled the agency to permit the products.
The Bitcoin ETFs have gained significant popularity, attracting a massive amount of investment. After a period of decline in the cryptocurrency market, the price of Ether has shown signs of recovery in recent months, New York Times reported.
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