A bipartisan group of U.S. House lawmakers have moved for the Securities and Exchange Commission (SEC) to approve a spot Ether (ETH) exchange-traded fund (ETF). The push comes amid heightened anticipation within the crypto community as all interested parties brace up for the potential benefits of such a financial product.
Bipartisan Support for Spot Ether ETF
On May 22, a bipartisan coalition, including Majority Whip Tom Emmer and Democrat Josh Gottheimer, forwarded a letter to SEC Chair Gary Gensler. The letter was aimed at making the regulatory agency see reasons why approving a spot Ether ETF would provide investors with a more secure and regulated avenue to access ETH, the second-largest cryptocurrency by market capitalization. An excerpt from the letter reads:
“We urge the Commission to maintain a consistent and equitable approach when reviewing upcoming applications for other digital asset-backed ETFs.”
According to the lawmakers, the SEC should just apply the same principles it used to approve spot Bitcoin ETFs as it reviews the pending Ether ETF applications. They argue in the letter that the legal considerations pertinent to Bitcoin also apply to Ethereum. Therefore, the regulator must take a uniform approach in dealing with the applications, the lawmakers submitted
Meanwhile, the content of the recent letter has sparked a wave of reaction within the crypto community. For instance, popular Bloomberg analyst Eric Balchunas has highlighted what a part of the lawmakers’ letter implies for the broader ETF industry. Balchunas pointed out that the term “other digital assets” signal the possibility of crypto ETF approvals extending even beyond Ethereum.
The cryptocurrency community is particularly attentive to the SEC’s upcoming decisions. That is because the approval of a spot Ether ETF would mark a significant milestone, similar to the introduction of spot Bitcoin ETFs in January 2024.
SEC Faces More Legislative Pressure
Adding to the momentum, on the same day, a separate group of lawmakers, including Patrick McHenry, Chairman of the House Financial Services Committee, and subcommittee heads like Bill Huizenga, urged the SEC to be transparent in its dealings with the custody services provider Prometheum. According to the lawmakers, the SEC’s previous responses on the classification of Ether as a security rather than a commodity, are not clear enough and do not satisfy their curiosity.
This legislative pressure also coincides with international developments. That is especially true in Hong Kong, where regulators are reportedly exploring staking opportunities for spot Ether ETFs. Such international moves highlight a growing trend of integrating cryptocurrencies into mainstream financial products globally.
