As anticipation builds for the approval of a spot Ethereum (ETH) exchange-traded fund (ETF) in the United States, House lawmakers are urging securities regulators to move forward with the new product. On May 22, House members from both parties, including Majority Whip Tom Emmer and Democrat Josh Gottheimer, sent a letter to SEC Chairman Gary Gensler. They urged the SEC to approve the spot Ethereum ETF, highlighting the potential for a more regulated and secure way for investors to acquire ETH.
In their letter, the lawmakers emphasized the need for the SEC to apply consistent and fair principles when reviewing applications for digital asset-backed ETFs. They pointed out that the legal considerations related to Bitcoin, which were used to approve spot Bitcoin ETPs, should also apply to Ethereum. “The Commission should apply the same principles it set out in approving spot Bitcoin ETPs when evaluating pending Ethereum ETF applications,” the lawmakers wrote.
Bloomberg ETF analyst Eric Balchunas shared the news on X on May 23, noting that the letter mentioned ETFs based on “other digital assets” without specifying any beyond Ethereum. Balchunas found it interesting that the lawmakers used a broader term, suggesting that the ETF industry might push the boundaries by submitting applications for various tokens to test the SEC's regulatory limits. The cryptocurrency community is eagerly awaiting the SEC’s decision on the Ethereum ETF, expected by the end of this month.
Amid this push for SEC approval of a spot ETH ETF, industry optimism has grown. On May 22, another group of lawmakers, including House Financial Services Committee Chairman Patrick McHenry and subcommittee Chairman Bill Huizenga, requested records from the SEC related to custody services provider Prometheum. They also expressed dissatisfaction with the SEC’s response to an earlier investigation concerning the classification of ether as a security rather than a commodity.
In contrast to the United States, where a spot Bitcoin ETF was launched in January 2024 but a spot Ethereum ETF has yet to be approved, Hong Kong regulators are reportedly considering offering staking opportunities for the spot ETH ETF. This new ETF is expected to begin trading alongside a spot Bitcoin ETF on April 30, 2024, demonstrating a more progressive stance towards cryptocurrency regulation compared to the current situation in the U.S.
