US senators push SEC to reject other crypto ETF proposals, casting doubt on Ethereum ETF approval chances
The chances of approval for the pending spot Ethereum exchange-traded fund (ETF) purposes this Could are strained as two US Senators urged the Securities and Change Fee (SEC) to reject other crypto ETF proposals.
Within the March 11 letter to SEC Chair Gary Gensler, Senators Jack Reed and Laphonza Butler suggested the monetary regulator to tighten its scrutiny of Bitcoin ETFs.
Lawmakers urge SEC to halt other crypto ETF approvals
The lawmakers raised considerations about approving extra crypto ETFs past Bitcoin, citing potential dangers for retail buyers.
They argued that other cryptocurrencies, like Ethereum, lack enough buying and selling volumes and integrity to help associated ETPs. Moreover, they doubt that futures markets for these cryptocurrencies will carefully correlate with spot markets, making it difficult to conduct efficient market surveillance and stop fraudulent actions.
They added:
“The SEC should strictly limit the precedential application of these approvals. While the bitcoin market has displayed serious weaknesses, it is nonetheless far more established and scrutinized than the market for any other cryptocurrency. However vulnerable Bitcoin may be to fraud and manipulation, markets for other cryptocurrencies are far more exposed to misconduct.”
As such, they concluded that the monetary regulator ought to defend retail buyers “from ETPs referencing thinly traded cryptocurrencies or cryptocurrencies whose prices are especially susceptible to pump-and-dump or other fraudulent schemes.”
The lawmakers’ letter arrived when Bloomberg analysts considerably lowered the likelihood of a spot Ethereum ETF approval to 35%.
Eric Balchunas, Bloomberg’s Senior ETF Analyst, suggested that the success of the Bitcoin ETFs may need unsettled some politicians, contributing to the pessimism surrounding the approval of spot ETH ETFs.
SEC might face lawsuits
Paul Grewal, the authorized chief at Coinbase, highlighted the potential for vital authorized conflicts ought to the SEC resolve to decline the pending Ethereum ETF purposes.
Grewal careworn that quite a few digital asset commodities, together with Ethereum, boast market high quality metrics surpassing even probably the most substantial traded equities.
In accordance to him:
“When compared to bitcoin, ETH’s future and spot market demonstrate EXACTLY the same type of high and consistent correlation that would enable market surveillance.”
Consequently, Grewal argued that the SEC’s refusal of an Ethereum ETF software can be grounded in flawed reasoning, given the sturdy market efficiency exhibited by Ethereum and related digital property.
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