Ether ETFs Filing Process Sees Abrupt Progress, Though Approval Not Guaranteed

·

The path toward a spot ether exchange-traded fund (ETF) in the United States has taken a sudden turn, with signs pointing to accelerating regulatory momentum. While final approval remains uncertain, recent developments suggest the U.S. Securities and Exchange Commission (SEC) is making meaningful progress in its evaluation of key filings.

Regulatory Push: 19b-4 Filings Under Accelerated Review

According to multiple sources familiar with the matter, the SEC has requested that several exchanges update their 19b-4 filings on an expedited basis. This regulatory form, formally known as Form 19b-4, is a critical step for any exchange seeking to list and trade new securities, including spot crypto-based ETFs.

The urgency behind these requests—coming just days before a key decision deadline—signals a shift in the SEC’s approach. Previously viewed as hesitant or even hostile toward spot ether ETF applications, the agency now appears to be engaging more constructively with applicants.

👉 Discover how regulatory clarity could unlock the next wave of crypto investment opportunities.

This doesn’t guarantee approval, however. Even if the 19b-4 filings are accepted, issuers must still secure approval for their S-1 registration statements, which detail the structure, risks, and disclosures related to the ETF. Unlike the time-bound 19b-4 process, the S-1 review timeline is open-ended, meaning the SEC could delay final authorization indefinitely.

Still, industry insiders interpret the accelerated 19b-4 updates as a positive signal. One firm in direct communication with the SEC noted a marked change in tone—just weeks ago, they believed the agency was stalling. Now, they feel they’re “on the right track” for eventual approval.

Shifting Sentiment: Analysts Boost Approval Odds

Market sentiment has shifted rapidly in response to these regulatory cues. Bloomberg Intelligence ETF analysts Eric Balchunas and James Seyffart recently raised their estimated probability of a spot ether ETF approval to 75%, up from just 25% earlier in the year.

Their updated forecast followed behind-the-scenes chatter suggesting the SEC may be adopting a more favorable stance. Although they later clarified that the 75% figure specifically referred to 19b-4 approval odds rather than full product launch clearance, the distinction still carries weight. The VanEck spot ether ETF, for example, faces a 19b-4 decision deadline on May 23, adding urgency to the current review phase.

This growing optimism has already impacted market dynamics. Ether (ETH) surged nearly 10% to $3,400 following news of the revised odds, reflecting investor confidence in a potential regulatory breakthrough.

The Core Question: Is Ether a Security?

At the heart of the SEC’s deliberation lies a foundational question: Is ether a security?

The classification of ETH has long been debated. Unlike certain altcoins that were sold in initial coin offerings (ICOs) with explicit promises of profit or development returns, ether was originally distributed through mining and crowdfunding without centralized guarantees.

However, the Ethereum network’s transition from proof-of-work (PoW) to proof-of-stake (PoS) in 2022 reignited regulatory scrutiny. Critics argue that staking—where users lock up ETH to validate transactions and earn rewards—resembles an investment contract, a key criterion under the Howey Test for securities classification.

If the SEC officially declares ether a security, it could complicate or even block spot ETF approvals, which are typically reserved for commodities like gold or bitcoin.

Yet recent moves by regulated financial firms suggest some institutions already treat ETH as something closer to a security. Prometheum, a special-purpose broker-dealer registered with the SEC, recently soft-launched an ether custody service—a move notable because Prometheum focuses exclusively on digital assets it classifies as securities.

This development may serve as an early indicator of how certain regulated players view ETH’s legal status, even in the absence of an official SEC ruling.

👉 See how institutional custody solutions are shaping the future of digital asset regulation.

Key Differences: Ether ETF vs. Bitcoin ETF

While spot bitcoin ETFs launched successfully in January 2024 after years of resistance, ether presents unique challenges:

Despite these hurdles, many experts believe that if bitcoin ETFs were approved, ether is next in line due to its size, liquidity, and established market presence.

What Happens Next?

All eyes are on the May 23 deadline for the VanEck 19b-4 decision. While this date marks only one step in a longer process, it could set the tone for other pending applications from firms like BlackRock, Fidelity, and Grayscale.

Even if 19b-4 forms are approved, S-1 reviews will continue behind the scenes. Investors should expect weeks—or possibly months—of additional scrutiny before any spot ether ETF begins trading.

Nonetheless, the current momentum suggests that regulatory resistance is softening. The SEC’s request for updated filings indicates engagement rather than dismissal, a crucial distinction in an environment where silence often meant rejection.

👉 Stay ahead of crypto regulatory trends and investment milestones with real-time market insights.

Frequently Asked Questions (FAQ)

Q: What is a spot ether ETF?
A: A spot ether ETF is an exchange-traded fund that directly holds ether (ETH) and tracks its real-time market price. Unlike futures-based ETFs, it doesn’t rely on derivatives contracts.

Q: Why is SEC approval taking so long?
A: The SEC is evaluating whether ether qualifies as a security and assessing market structure risks like fraud and manipulation. These concerns have slowed approval despite growing investor demand.

Q: How does a 19b-4 filing differ from an S-1?
A: The 19b-4 filing is submitted by exchanges to list a new product and is subject to a statutory timeline. The S-1 is filed by issuers to register the ETF itself and can be reviewed indefinitely by the SEC.

Q: Will a spot ether ETF boost ETH’s price?
A: Historically, similar approvals—like those for bitcoin ETFs—have led to short-term price surges due to increased institutional inflows and market confidence.

Q: Can I invest in ether through existing ETFs?
A: Currently, only futures-based ether ETFs are available in the U.S. A spot ETF would allow direct exposure to ETH’s market price without derivatives.

Q: What happens if the SEC rejects the filings?
A: Issuers can revise and resubmit their applications or pursue legal challenges, as Grayscale did successfully with its bitcoin trust conversion.

Core Keywords:

With regulatory signals shifting and market anticipation building, the approval of a spot ether ETF may be closer than ever—though final clearance remains contingent on complex legal and structural reviews.