Ethereum ETFs Approved By Summer?

Securities and Exchange Commission (SEC) Chair Gary Gensler suggested the approval and launch of spot Ethereum exchange-traded funds (ETFs) could be a reality by the end of this summer.

During a Senate hearing, Gensler suggested that the approval for ether ETFs is essentially complete, and certain registration details are being “hammered out” by the SEC’s staff.

Is Ethereum a Commodity?

During the hearing, Gensler avoided answering the question of whether or not ETH is a commodity. 

Gary Gensler says Ethereum Spot ETFs likely to receive approval by "Some time" at the of summer at Congressional Hearing 🇺🇸☝#Ethereum #ETF $ETH

— MartyParty (@martypartymusic) June 13, 2024

Instead, the chair reiterated his concerns about the crypto industry being “noncompliant” and argued that the CFTC is not yet equipped to regulate crypto markets like the SEC does, he said.

However, CFTC Chair Rostin Behnam affirmed that Ethereum is a commodity during the same hearing.

Ultimately, Gensler should determine whether Ethereum is a commodity because this would help identify which US regulator is appropriate for different types of tokens. 

While the SEC oversees securities tokens, the CFTC manages commodities and others (Gensler has consistently stated that most cryptocurrencies are securities but has not specified which ones, apart from those listed in enforcement actions.)

However, Gensler emphasized that not all crypto assets are securities, and some fall under Behnam’s jurisdiction, but those that are securities must disclose information to the public. 

The CFTC Needs a Bigger Budget

Behnam highlighted that the CFTC lacks certain regulatory tools necessary for monitoring crypto markets, such as registration, custody, surveillance, and oversight, which have strengthened American capital and derivative markets. He mentioned that a larger budget would require the CFTC to oversee crypto trading effectively.

Behnam also addressed prediction markets and his agency’s stance against contracts predicting election outcomes, stating that they are taking steps to ban such contracts as they conflict with existing law.

As CryptoMode reported, several PolitiFi memecoins soared at the beginning of May after the Commodity Futures Trading (CFTC) proposed a formal ban on event contracts related to political outcomes. 

Therefore, prediction platforms like Polymarket, where users speculate on real-world events, would be restricted under this proposal. Contracts related to political contests, awards, and game outcomes for US-regulated entities would be prohibited.

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