Spot Ether ETFs get SEC nod without a vote from Gary Gensler

The United States Securities and Exchange Commission (SEC) approved spot Ether exchange-traded funds (ETFs) on May 23, but the approval process was different from the spot Bitcoin ETFs approved in early January.

Unlike spot Bitcoin ETFs, which were approved by a vote of a five-member committee including SEC chairman Gary Gensler, spot Ether ETFs received approval from the SEC’s Division of Trading and Markets.

The SEC approved 19b-4 filings from several major financial firms, including BlackRock, Fidelity, Grayscale, Bitwise, VanEck, Ark, Invesco Galaxy and Franklin Templeton, but did not provide additional comment beyond the official decision. The application stated the following:

“On behalf of the Commission, by the Department of Trade and Markets, pursuant to delegated authority.”

While many in the crypto community were surprised by the discrepancy in the approval procedure of the two crypto ETFs, Bloomberg ETF analyst James Seyffart explained that this is normal.

He noted that many approvals are generally handled in a similar manner and that it would be impractical for the SEC to hold a formal vote on every resolution or document. He added that it would be interesting to see the political alliances if there was a vote.

Despite Seyffart’s statement, some remain skeptical. A user on X noted that a commissioner could appeal the decision within the next 10 days, suggesting that the delegated power could be used to conceal politically sensitive votes.

The most interesting part of the application for me so far is this:

The approval was granted through delegated authority, meaning public commissioners’ votes will not be seen.
But this also means that any commissioner (Crenshaw maybe?) could technically object and ask for review/vote. pic.twitter.com/744WGX7f9D

— James Seyffart (@JSeyff) May 23, 2024

Another user

The crypto industry celebrated the SEC’s approval of the spot Ethereum ETF, calling it a “historic move.”

Although 19b-4 forms have been approved, S-1 registration statements must be processed before trading can begin. This means it could still be weeks or months before spot Ether ETFs launch on exchanges as issuers await SEC approval for S-1 filings.