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The U.S. Securities and Exchange Commission (SEC) has asked aspiring ether exchange-traded fund exchanges to update 19b-4 filings before a key deadline this week.
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The SEC was previously expected to reject the ETF applications, and while there is no guarantee of approval, this move signals progress is being made.
The exchanges that want to list and trade shares of spot ether {{ETH}} exchange-traded funds are abruptly being asked by regulators to update key documents related to these products.
Exchanges are being asked by the U.S. Securities and Exchange Commission to expedite updates to 19b-4 filings, three people familiar with the situation told CoinDesk, suggesting they may approve these filings before a key deadline next Thursday.
However, that does not mean that the ETFs will be authorized. Potential issuers must also approve their S-1 filing before the products can be traded. The SEC could take an indefinite amount of time to approve the S-1 documents, a person familiar with the matter said, because it is not tied to a deadline.
One company said in discussions with the SEC that it feels like it is on track for approval, contrary to the feeling that the SEC was behind the curve several weeks ago, according to a person familiar with the matter.
Bloomberg Intelligence ETF analysts Eric Balchunas and James Seyffart their chances increased for approving a spot ether ETF from 25% to 75% on Monday, after hearing rumors that the SEC could take a more favorable stance on the applications.
Them later corrected their statement, which said the odds were related to the 19b-4 approvals. The SEC is expected to make a decision on the VanEck spot ether ETF on May 23.
The SEC has been investigating whether ether, the main asset of the Ethereum blockchain, is a security, launching a formal investigation after the network switched from a proof-of-work consensus mechanism to a proof-of-stake mechanism.
If ether is considered a security by the SEC, that could be a reason for the regulator to reject spot ether ETF applications.
A test of the agency’s view on whether ETH is a security recently emerged at Prometheum. The special purpose broker announced on Monday that it had soft-launched its ether custody service. The company eventually plans to launch custody and trading services for other digital assets – most importantly, assets that are treated as securities in the US, not commodities.
Read more: Ether rises 10% to $3.4K after Bloomberg boosts chances of approval of Spot ETFs
UPDATE (20 May 2024, 21:10 UTC): Adds additional information and context.
