The U.S. Securities and Exchange Commission (SEC) has commenced discussions with prospective Ethereum ETF issuers regarding S-1 registration statements, as reported by a well-placed source. This development signals the initial stages of the SEC’s engagement with Ethereum ETFs, reflecting a nascent but significant shift in regulatory focus.

“Basically, it's just starting,” remarked a high-ranking official from one of the issuers when queried about the conversations concerning S-1 forms. “It feels a little like [the Division of Investment Management] was more-or-less caught off-guard by the change of tune. So, just starting.” The source remained cautiously optimistic, indicating that while progress toward an Ethereum ETF is unlikely to be abandoned, the path forward is still uncertain.

For Ethereum ETFs to receive approval, two key steps are necessary: the SEC must first approve the 19b-4 forms, which outline the rule changes needed to list the ETFs on exchanges, and then the S-1 registration statements must become effective. Only after these steps can trading commence.

The approval process typically involves iterative revisions. Forms are often returned for amendments and must be refiled before final approval is granted. While there has been notable activity around the 19b-4 forms, with issuers such as Fidelity recently filing an amended S-1 form, discussions on S-1s have just begun, suggesting further amendments may be forthcoming.

Today marks a crucial deadline for the SEC to approve or deny the 19b-4 form for the VanEck Ethereum ETF. Observers are hopeful that the SEC might approve multiple issuers simultaneously, mirroring the approach taken with Bitcoin ETFs. Bloomberg ETF analyst Eric Balchunas speculated on social media platform X that the SEC's decision could come around 4 p.m. ET, based on historical patterns of past ETF approvals.

However, even if the 19b-4 forms are approved today, there could still be delays before the S-1 forms are finalized and effective, potentially postponing the start of trading. Balchunas highlighted this in a recent interview with The Block, noting, “I don't know how fast the fast track is, but it's going to be probably a mad scramble for the next couple days, maybe even weeks — depends on the S-1.”

This cautious optimism and the regulatory nuances underscore the complex and evolving landscape of Ethereum ETF approval, reflecting both the potential and challenges inherent in bringing such financial products to market.