SEC’s Unexpected Push for Ethereum ETFs: Urges Exchanges to Accelerate 19B-4 Filings

The U.S. Securities and Exchange Commission has been reported to have asked exchanges to update their 19B-4 filings for Spot Ethereum ETFs on an accelerated basis. This sudden move, highlighted in a recent Coinbase report, could mean the SEC is gearing up to greenlight these ETF applications ahead of a critical deadline this Thursday. The implication is that Ethereum ETFs could go live, which might begin an entirely new future for Ethereum and the cryptocurrency market.

SEC Fast-Tracking Process

The SEC has asked exchanges interested in listing spot Ethereum ETFs to update their 19B-4 filings urgently. 

According to multiple sources, this request suggests progress toward possible approval. Note that both the 19B-4, an exchange filing for rule changes, and the S-1, a registration statement, need to be approved before the ETFs can be traded.

“Launching tokens at high fully diluted valuation and low circulating supply can result in dilutions from future unlocks which can place selling pressure on tokens,” the SEC’s move to fast-track these filings comes as a surprise, given that it was expected that it would reject the ether ETF filings.

Analysts Eric Balchunas and James Seyffart noted at Bloomberg Intelligence that the odds for approval of a spot ether ETF increased to 75% from 25%, signaling the SEC’s more friendly stance.

Regulatory Considerations

Despite the optimism, there are regulatory hurdles to pass. The SEC has been investigating whether ether, the native asset of the Ethereum blockchain, is a security. This investigation, which has been called forth by Ethereum’s transition from a proof-of-work to a proof-of-stake mechanism, could impact the SEC’s decision on the ETF applications.

One recent development that could impact this decision is Prometheum’s soft launch of an ether custody service. This could set a precedent for how digital assets treated as securities are managed and affect the SEC’s view on Ethereum ETFs.

The next few days will be crucial in determining Ethereum’s future trajectory and its role in the financial markets. 

Impact on ETH Price and the Crypto Market?

The news is especially bullish for Ethereum, whose price has surged over 11% in the last 24 hours to $3,413.17. If approved, Ethereum ETFs could follow the trajectory of Bitcoin, whose price surged significantly after ETFs were approved in January 2024. 

The approval of spot Ethereum ETFs would boost Ethereum’s market value and enhance its credibility and popularity among investors.

The SEC’s decision would most likely generate renewed interest in the cryptocurrency sector, driving innovation and probable growth in the development of more crypto-based financial products.

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