SEC approves more Ethereum ETFs as trading is about to start

The U.S. Securities and Exchange Commission (SEC) has approved more Ether exchange-traded funds (ETFs). Grayscale’s mini Ethereum ETF got the green light, along with ProShares’ Ethereum ETF.

The funds are set to start trading next week, right alongside all the other spot Ether ETF products.

Grayscale’s mini Ethereum ETF will use assets from its bigger Ethereum ETF, making it more accessible and cheaper. They also have a mini Bitcoin ETF with lower fees than their main Bitcoin product.

This approval is a big part of Grayscale’s plan to turn its existing Ethereum Trust into a spot Ethereum ETF. Right now, their Ethereum Trust operates like a closed-end fund, which makes it a pain to redeem shares.

Back in May, the SEC shocked everyone by approving proposals from BlackRock, Grayscale, and a bunch of other asset managers to launch spot Ethereum ETFs.

James Seyffart, an ETF analyst at Bloomberg, said the mini fund should help with the expected outflows from Grayscale’s larger fund conversion. Grayscale reportedly said that:

“Grayscale is excited to share that the SEC has approved Grayscale Ethereum Mini Trust’s Form 19b-4.”

Seyffart predicted that the funds would all start trading next week on July 23. Gary Gensler, the SEC Chairman, has been at the center of regulatory battle over cryptocurrencies.

Under his leadership, the SEC has been strict. They argue that many digital assets, including some cryptocurrencies, should be regulated as securities. 

This has led to more scrutiny and enforcement actions against various crypto companies and exchanges. Despite this though, the SEC approved Bitcoin ETFs earlier in 2024. Then approved Ethereum’s a few months after.

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The SEC is involved in numerous legal battles with crypto-related companies. The agency has won several cases against top players in the industry, and these wins have strengthened the SEC’s position and its authority to regulate the crypto market.

Gensler’s approach has faced a lot of criticism from the crypto industry and some political figures. Entrepreneur Mark Cuban has called for Gensler’s removal.

Cuban argued that Gensler’s approach makes it impossible for crypto companies to follow clear rules. Some industry leaders have accused Gensler of regulating through enforcement and litigation rather than providing clear guidelines.

Some lawmakers have pushed for bills that would limit the SEC’s regulatory powers over crypto and give more authority to other agencies like the Commodity Futures Trading Commission (CFTC). However, these efforts have been challenged in Congress.