The US Securities and Exchange Commission (SEC) approved applications from major exchanges, including Nasdaq, CBOE, and the NYSE, to list exchange-traded funds tied to the price of ether today (Thursday). This approval potentially opens the door for these products to begin trading later this year.

Issuers to Seek Regulatory Approval

Nine issuers, including VanEck, ARK Investments/21Shares, and BlackRock, applied to launch ETFs tied to ether following the SEC's approval of spot Bitcoin ETFs in January. Despite the positive feedback, these applicants must obtain approval for ETF registration statements detailing investor disclosures before the funds can start trading.

The SEC’s notice stated: "After careful review, the commission finds that the proposals are consistent with the Exchange Act and rules and regulations thereunder applicable to a national securities exchange Exchange An exchange is known as a marketplace that supports the trading of derivatives, commodities, securities, and other financial instruments.Generally, an exchange is accessible through a digital platform or sometimes at a tangible address where investors organize to perform trading. Among the chief responsibilities of an exchange would be to uphold honest and fair-trading practices. These are instrumental in making sure that the distribution of supported security rates on that exchange are effectiv An exchange is known as a marketplace that supports the trading of derivatives, commodities, securities, and other financial instruments.Generally, an exchange is accessible through a digital platform or sometimes at a tangible address where investors organize to perform trading. Among the chief responsibilities of an exchange would be to uphold honest and fair-trading practices. These are instrumental in making sure that the distribution of supported security rates on that exchange are effectiv Read this Term. In particular, the commission finds that the proposals are consistent with Section 6(b)(5) of the Exchange Act, which requires, among other things, that the exchanges' rules be designed to prevent fraudulent and manipulative acts and practices and, in general, to protect investors and the public interest."

US SEC approves exchange applications to list spot ether ETFs https://t.co/zvJ6e0L99U pic.twitter.com/okQKGNpLxx

— Reuters (@Reuters) May 23, 2024

Market participants were prepared for a negative outcome, especially considering the lack of engagement from the SEC on the applications, Reuters reported. However, in an unexpected turn of events, the SEC's officials requested the exchanges to make quick adjustments to the filings on Monday, leading to a rush to meet the new requirements in a short time.

Positive Market Sentiment Boosts Ether

However, the SEC has not set a deadline to decide on the registration statements, leaving industry participants uncertain about when trading could commence. Optimism about the SEC's approval of ether ETF pushed the price of the second-largest cryptocurrency by 25% on the weekly chart. Notably, the asset management firm plans to avoid staking Staking Staking is defined as the process of holding funds in a cryptocurrency wallet to support the operations of a blockchain network. In particular, staking represents a bid to secure a volume of crypto to receive rewards. In most case however, this process relies on users participating in blockchain-related activities via a personal crypto wallet.The concept of staking is also closely tied to the Proof-of-Stake (PoS). PoS is a type of consensus algorithm in which a blockchain network aims to achieve Staking is defined as the process of holding funds in a cryptocurrency wallet to support the operations of a blockchain network. In particular, staking represents a bid to secure a volume of crypto to receive rewards. In most case however, this process relies on users participating in blockchain-related activities via a personal crypto wallet.The concept of staking is also closely tied to the Proof-of-Stake (PoS). PoS is a type of consensus algorithm in which a blockchain network aims to achieve Read this Term and derivatives to address regulatory concerns.

In the run-up to the decision-making deadline, the SEC’s Chair Gary Gensler, known for his skepticism toward cryptocurrencies, declined to comment when reporters asked about the ether ETFs. A spokesperson from the commission also stated that the agency would not provide further comments on the matter. Earlier, a section of US Congress urged Gensler to approve ether ETFs.