Home
News
The SEC is supposed to eye down on Ethereum ETFs as the regulator is ongoing legal action against Coinbase and Binance.
The US Securities and Exchange Commission (SEC) does not want to undermine its discussions in continuing legal action against Binance and Coinbase. Scott Johnsson, a finance lawyer expressed his opinion on why the SEC may comfortably deny spot Ether (ETH) ETFs. He also discussed the launch of Ethereum foundations by the SEC.
3 Theories why the SEC may disapprove Ethereum ETFs
As the days pass, crypto enthusiasts are waiting for the SEC’s final decision on spot Ether ETF. Based on the current news and scenarios, it is expected that the commission may comfortably deny the ETF and satisfy senator blowback.
On March 22, Scott Johnsson, the general partner of Van Buren Capital and finance lawyer came up with three theories that may allow the commission to deny the upcoming ETF approval.
Furthermore, Johnsson also discussed the SEC’s probe into Ethereum and the launch of the Ethereum foundation.
Based on the Fortune report on March 20, the investigation by the commission into the Ethereum foundation could help the regulatory coverage to define ETH as a security. Additionally, in 2022, the commission has organized a campaign to categorize ETH as a security following the blockchain’s transformation from proof-of-work (PoW) to proof-of-stake (PoS).
According to Johnsson, the commission could be considering the probe to calm crypto skeptics who have demanded a strict stance from the agency. Recently, Jack Reed and Laphonza Butler, democrat senators requested the commission not to permit any further crypto ETFs.
Another factor is the need for a non-correlation objection to deny the ETH ETFs and the commission may use this way to reject ETFs as the non-correlation objects may not hold up. However, denying ETH on correlation analysis may result in a temporary solution as the correlation levels are continuously advancing over time, said Johnsson.
According to Johnsson, the probe is another factor that could push the SEC to deny the spot ETH ETFs. The ongoing investigation will help the commission deny the ETF approval as well as take legal action against Coinbase and Binance.
The commission charged both exchanges for offering unregistered securities including 19 tokens. Nonetheless, the token list doesn’t include Ethereum. Paul Grewal, Coinbase’s chief legal officer responded to the Ethereum probe.
“The SEC has no good reason to deny the ETH ETP applications,” Grewal added.
Furthermore, SEC chairman Gary Gensler has denied answering any queries about ETH’s qualification as a security asset or spot ETF approval.
About Ethereum ETFs
Ethereum Exchange-traded fund (ETF) is a financial tool mainly constructed to deliver exposure to ETF. It tracks the market price of the digital asset and permits investors exposure to the asset without actual purchase.
It also helps in mitigating threats and improving returns by applying investment across different asset classes. The commission delayed the decision on ETH Exchange-traded funds and is supposed to make the final decision on May 23, 2024.
Anurag is working as a fundamental writer for The Coin Republic since 2021. He likes to exercise his curious muscles and research deep into a topic. Though he covers various aspects of the crypto industry, he is quite passionate about the Web3, NFTs, Gaming, and Metaverse, and envisions them as the future of the (digital) economy. A reader & writer at heart, he calls himself an “average guitar player” and a fun footballer.
