Gary Gensler, the chair of the U.S. Securities and Exchange Commission (SEC), is set to make a crucial decision on spot Ethereum exchange-traded funds (ETFs) today. In January, the SEC panel voted on spot Bitcoin ETFs, with Hester Peirce and Mark Uyeda voting in favor and Caroline Crenshaw and Jaime Lizárraga voting against. Gensler cast the deciding vote, resulting in a 3-2 approval. The same panel will now vote on VanEck’s spot Ethereum ETF on May 23.
Peirce, also known as “Crypto Mom,” has been supportive of digital assets and decentralizing the financial system. While she hasn’t disclosed her stance on spot Ethereum ETFs, she has remained engaged with the Ethereum community. Crenshaw, on the other hand, has been critical of the cryptocurrency industry and expressed concerns about fraud and market manipulation. She believes that approving these products would fail to protect U.S. investors due to the lack of oversight and regulation in the spot trading market.
Uyeda, like Peirce, has criticized the SEC’s approach to cryptocurrency regulation and its denial of a Coinbase petition. Although he voted in favor of spot Bitcoin ETFs, he had reservations about the decision process. Lizárraga voted against approving spot Bitcoin ETFs and argued that Bitcoin had not fulfilled its promise as an alternative to traditional finance. He also disagreed with the SEC’s enforcement-focused approach to cryptocurrency regulation.
Gensler, as the chair of the SEC, will cast the deciding vote on spot Ethereum ETFs. However, it is expected that he will not approve them due to regulatory uncertainties surrounding Ethereum’s classification and concerns about market manipulation and lack of oversight. Gensler has highlighted the fragmented nature of spot trading and the need for clearer guidelines in the cryptocurrency space. These factors, combined with the ongoing SEC investigation into Ether’s status as a potential security, suggest that Gensler will vote against approving spot Ethereum ETFs.
While some fund managers anticipate an SEC denial, there is still a possibility of approval. Bloomberg analysts predict a 25% chance of at least one spot Ethereum ETF being approved on May 23, down from 70% in January.