As a researcher with a background in law and finance, I find Johnsson’s insights on the SEC’s potential classification of Ethereum as a security to be an important consideration in the ongoing debate about the approval of Ethereum Spot Exchange-Traded Funds (ETFs).
The anticipation is high in the cryptocurrency community as we wait for the SEC’s verdict on Ethereum Spot ETFs based on Ethereum. Many discussions have emerged, exploring the potential factors that might influence the SEC’s decision.
Expert: Lawyer and author Scott Johnsson brings up a significant observation in the ongoing discourse: The Securities and Exchange Commission (SEC) could take Ethereum’s security classification into account while making decisions regarding exchange-traded products in the approaching days, specifically on May 31st.
Ethereum Security Question Poises Approval Hurdles
As an analyst, I’ve come across a post on X where Scott Johnsson raised some intriguing questions regarding Nasdaq Stock Market LLC (Nasdaq or Exchange) and its proposal to list and trade Shares of the iShares Ethereum Trust. The underlying concern revolves around whether Nasdaq has followed due procedures under Rule 5711(d), specifically with regard to commodity-based trust shares, given the unique nature of the Ethereum assets held by the trust.
The Commodity-Backed Trust Shares being categorized as securities raises the possibility that the SEC could view ETH in the same light. This classification could present a challenge for the approval of spot Ethereum ETFs.
According to Johnsson’s perspective, the SEC’s consideration of the Ethereum (ETH) security question in the upcoming ETF decision is a strong indication of an official stance, as this topic was previously overlooked during the evaluation process for Bitcoin-based products.
The Post read:
As a researcher, I want to bring your attention to an important development: The Securities and Exchange Commission (SEC) is reportedly deliberating over the ethics of using Ethereum’s security as a qualifying criterion for its upcoming Spot Ethereum Trust exchange-traded fund (ETF) application. This issue was not addressed during the consideration of spot/futures Bitcoin ETF proposals in the past, according to my current understanding.
The lawyer asserts that section 15 U.S.C. 78s(b)(2)(B) requires the SEC to provide reasons for potential rejections when noticed. This issue was brought up during comments on every ETH spot ETF application filing, but it had not been previously addressed or queried specifically in relation to a Bitcoin spot ETF submission.
As a crypto investor, I understand that Johnsson’s interpretation of the SEC’s questioning is that they may intend to deny Ethereum spot ETF proposals due to concerns that the filings do not meet the requirements if the assets being held are considered securities and were incorrectly classified as commodity trust shares.
As a researcher delving into the intricacies of the cryptocurrency sphere, I’ve come across Johnsson’s assertion that his perspectives might have influenced the Securities and Exchange Commission’s (SEC) recent actions. However, I believe there could be additional factors at play that are yet to be fully understood by the wider crypto community.
Final Reviewable Agency Action
Prior to the May 31 cut-off, Johnsson anticipates that the SEC will likely issue a minimum of 30 pages outlining their analysis on whether an Ethereum spot ETF adheres to the Exchange Act regulations. Consequently, this would represent the final action from the SEC that can be scrutinized before the deadline.
To move forward with approving Bitcoin futures and spot products, they will need to expand beyond the existing regulatory framework set by the Securities Act of 1933 and the constraints imposed following the GBTC court decision by the DC Circuit.
According to Johnsson, the regulatory body has multiple choices to make, and each decision could bring about significant outcomes.
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2024-05-15 00:12