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Despite the SEC’s engagement with issuers, industry experts warn that the process isn’t finished yet. “Basically, it’s just starting,” said a high-ranking member at an ETF issuer, referring to the S-1 discussions.
The wait for a US exchange-traded fund (ETF) tied to Ethereum (ETH) might be nearing its end. The Securities and Exchange Commission (SEC) has started initial talks with potential issuers about their S-1 registration statements for Ethereum ETFs, according to The Block.
This is an important step forward after the SEC approved 19b-4 forms for several Bitcoin ETFs in one comprehensive order earlier this year. The 19b-4 form explains how the ETF will work, while the S-1 registration statement details the offering, including risks and investment objectives.
SEC Decision Day for VanEck Ethereum ETF
Despite this positive development, industry experts warn that the process isn’t finished yet. ‘Basically, it’s just starting,’ said a high-ranking member at an ETF issuer, referring to the S-1 discussions. ‘It seems like the SEC was surprised by the shift from Bitcoin to Ethereum ETFs.’ The source added they were cautiously optimistic but noted there could be more delays.
In order to launch an Ethereum ETF, both the 19b-4 and S-1 forms need SEC approval. The 19b-4 forms usually involve back-and-forth revisions before final approval. While several Ethereum ETFs have submitted 19b-4 forms, only Fidelity has recently filed an amended S-1 form. The focus on S-1 discussions suggests more amendments might be coming.
Adding another layer of interest, today, May 23rd, 2024, is the deadline for the SEC to rule on the VanEck Ethereum ETF’s 19b-4 form. Given the precedent of bundling Bitcoin ETF approvals, analysts are optimistic about a potential multi-approval decision today. Bloomberg ETF analyst Eric Balchunas expects the SEC’s decision around 4 p.m. ET, noting that similar announcements have been made in the late afternoon.
SEC’s Slow S-1 Process
Even if the SEC approves the 19b-4 forms today, the path to trading isn’t entirely clear. Finalizing the S-1 registration statements could take additional time, potentially delaying the launch of Ethereum ETFs. As Balchunas highlighted:
“I don’t know how fast the fast track is, but it’s going to be probably a mad scramble for the next couple days, maybe even weeks – depends on the S-1.”
The SEC’s engagement on S-1 forms signifies a positive development for Ethereum ETF hopefuls. However, with potential amendments and the S-1 approval process still ahead, investors should prepare for a wait before these long-awaited products hit the market.
