KANALCOIN NEWS – According to James Seyffart, Bloomberg ETF analyst, United States Securities and Exchange Commission (SEC) implicitly accepts Ether as a commodity. This admission comes amid them approving an ETH futures exchange-traded fund (ETF) last year. This means a Spot ETF variant is likely to be established this year.
In the Crypto Quant Webinar session on January 4, Seyffart mentioned the approval of an Ether futures ETF in October 2023. That the SEC does not prohibit coin classification through the ETF registration process with the Commodity Futures Trading Commission (CFTC).
“The CFTC openly calls Ethereum a commodity. They don’t call it a security,” Seyffart said. “The SEC has approved an Ethereum futures ETF. So again Gary Gensler won’t explicitly say whether Ethereum is a security or a commodity, but in their actions, by agreeing to such Ethereum futures ETFs, they are implicitly accepting such Ethereum futures as commodity futures.”
Seyffart also added that the SEC likely does not have the bandwidth to ban such classifications.
Along with the launch of nine funds on the Chicago Board Options Exchange, Ether ETF futures first traded in the US on October 2 with several investment firms. This includes ProShares, VanEck, Bitwise, Valkyrie, Kelly and Volshares.
Furthermore, Seyfart also explained that the SEC must remove the permit for listing ETF futures if it considers Ether to be a security, not a commodity.
This classification is important because securities and commodity ETFs have different legal requirements, with different tax and regulatory burdens attached to the securities.
“It’s not just that the SEC will be at odds with the crypto industry. If they call Ethereum a security, they will also be in conflict with existing similar regulations. Namely the CFTC. That’s why I think we could see a potential Ethereum ETF approved this year as well,” the analyst said.
“There’s a precedent here for saying it matters how these things are listed,” Seyffart added.
This is not the first time the SEC has faced a similar case. Recently, Uncle Sam’s country’s Securities Commission also lost in court in a similar case. That is when they attempted to exempt the Spikes Index — an index of stock volatility — from the definition of securities futures under the claim of promoting competition among the indices.
The SEC has a final decision deadline for the VanEck, ARK 21Shares, and spot Hashdex Ether ETFs in May 2024, with other decision deadlines coming in the following months.
However, before that, the regulator must deliver its verdict on spot Bitcoin ETFs. Seyfartt predicts approval on January 10, with $10 billion flowing into Bitcoin ETFs within 12 months.
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