In a move that has the crypto community buzzing, the US Securities and Exchange Commission (SEC) has asked major exchanges to refine their applications for spot Ethereum ETFs. 

According to a Reuters report, sources familiar with the process say this request is interpreted as a positive signal that the regulator may be ready to greenlight these long-awaited products.

Ethereum ETF Approvals Inch Closer

The exchanges in question – Nasdaq, CBOE, and NYSE – have been working on submissions to list Ethereum ETFs provided by asset managers like VanEck and ARK Investments/21Shares. Typically, such regulatory feedback from the SEC precedes approval rather than rejection. 

“The SEC’s engagement with the exchanges on the ether ETF filings is a surprising and encouraging development for the crypto industry,” said one source who declined to be named.

This shift in the SEC’s stance marks a potential sea change, as the regulator had previously appeared skeptical about approving spot-based cryptocurrency ETFs. Its rejection of numerous Bitcoin ETF applications over the years, citing market manipulation concerns, dampened industry hopes.

However, the SEC was forced to greenlight Bitcoin futures ETFs last October after a court challenge from Grayscale Investments and spot Bitcoin ETFs in January. Those products have since attracted significant interest from diverse investors, including hedge funds, wealth advisors, and retail traders.

Watershed Moment For Crypto Industry

The potential approval of Ethereum ETFs would be another major milestone for the crypto sector. ETH, the native cryptocurrency of the Ethereum blockchain, has emerged as the second-largest digital asset by market capitalization, trailing only Bitcoin.

“An SEC-approved Ethereum ETF would be a huge deal, providing investors with a regulated and convenient way to gain exposure to the second-largest cryptocurrency,” said an industry executive familiar with the matter.

Per the report, the SEC’s decision on the Ethereum ETF filings is expected by the end of this week. While the exchange applications are just the first step in the approval process, and the SEC still needs to sign off on the ETF registration statements, this latest development has fueled optimism within the crypto community.

“The SEC’s willingness to engage constructively with the exchanges on these filings is a clear indication that the regulator may be warming up to the idea of ether ETFs,” the industry source said. “This could be a major turning point for the crypto industry.”

As of the time of this reporting, ETH is trading at $3,780, having surged by a substantial 22% over the past 24 hours. This surge was driven by rising market expectations of imminent approval for the new ETFs by the US Securities and Exchange Commission. 

Featured image from Shutterstock, chart from TradingView.com