The U.S. Securities and Exchange Commission (SEC) may be accelerating the launch of Ethereum futures exchange-traded funds (ETFs) as the regulator rushes to clear its desks ahead of the potential government shutdown on October 1.
The SEC is currently parsing through a mountain of crypto ETF filings. To date, all spot bitcoin ETF applications have been denied, though it has approved futures-based bitcoin ETFs. Now, things appear to be looking optimistic for Ethereum ETFs.
On Wednesday, the SEC extended the deadline for deciding whether to approve two Ethereum ETFs from VanEck and ARK 21Shares. The next day, VanEck issued a press release stating that it was preparing for the “upcoming launch” of the VanEck Ethereum Strategy ETF (EFUT), an actively managed fund that invests in ether future contracts, which gives investors a way of benefiting from ether ownership without directly holding the digital asset.
Bloomberg ETF analyst Eric Balchunas said on X (formerly Twitter) that trading for Ether futures ETFs could start as early as next week: “Ether futures ETFs could be trading as early as Tuesday as the SEC looks to speed things up in order to get it done [before] looming shutdown, just like they sped up delays on spot bitcoin ETFs. If so, issuers likely in mad scramble as we speak to update docs.”
NEW: Ether futures ETFs could be trading as early as Tuesday as SEC looks to speed things up in order to get it done bf looming shutdown, just like they sped up delays on spot bitcoin ETFs. If so, issuers likely in mad scramble as we speak to update docs. Stay tuned. @JSeyff pic.twitter.com/onTpS3r53m
— Eric Balchunas (@EricBalchunas) September 28, 2023
Other Ethereum ETFs, like the Hashdex Nasdaq Ethereum ETF and Grayscale Ethereum Futures Trust ETF, are also in the mix.
During an appearance before the U.S. House Financial Services Committee on Wednesday, SEC Chair Gary Gensler warned that up to 93% of SEC staff could be furloughed during a shutdown, leaving behind a skeleton staff that could only perform basic operations. In his testimony, Gensler told lawmakers that the agency was still mulling its response to a Federal judge’s ruling last month that the SEC reconsider its rejection of Grayscale Investments’ attempt to convert the Grayscale Bitcoin Trust (GBTC) into an ETF. The ruling could affect other applications.
“It’s still an active consideration of the commission,” Gensler said in his testimony.
But Gensler also reiterated his concerns about the industry. “Given this industry’s wide-ranging noncompliance with the securities laws, it’s not surprising that we’ve seen many problems in these markets,” Gensler said. “We’ve seen this story before. It’s reminiscent of what we had in the 1920s before the federal securities laws were put in place.”