The SEC moved closer to allowing ETH funds to launch after accelerating discussions with issuers. On Thursday, the Securities and Exchange Commission approved ether ETF proposals, advancing their potential launches.

The SEC approved 19b-4 proposals from Cboe, NYSE Arca, and Nasdaq exchanges "on an accelerated basis," as noted on the agency's website. These exchanges aim to list spot ether ETFs from VanEck, Ark Invest, BlackRock, Fidelity, Franklin Templeton, Bitwise, Grayscale, and Invesco. This approval is a step towards these funds entering the market.

The SEC's order stated that the proposals align with the Exchange Act and related regulations for a national securities exchange. The Exchange Act aims to "prevent fraudulent and manipulative acts and practices" and "protect investors and the public interest."

However, before any spot ether ETFs can trade, the SEC must also approve S-1 registration statements from the fund issuers. A Grayscale spokesperson expressed appreciation for the constructive engagement with regulators.

Industry experts have noted that S-1 approvals might take some time. Bloomberg Intelligence analyst James Seyffart suggested there could be days, weeks, or even months between approval and launches.

Matthew Sigel of VanEck praised the SEC's decision, stating that evidence shows ETH is a decentralized commodity, not a security. The SEC had less to review for ether ETF proposals compared to bitcoin ETFs.

One key difference between spot bitcoin ETFs and ether ETF proposals was the issuers' intention to stake their ETH holdings. Staking involves depositing ETH to secure the Ethereum blockchain and earn yield.

Exchanges and issuers recently amended their filings to remove staking language, anticipating SEC opposition. Despite growing optimism about SEC approval for ether ETFs, questions about ETH's status as a security or commodity remained.

Variant Chief Legal Officer Jake Chervinsky noted that SEC approval of spot ether ETFs would likely indicate the agency does not view unstaked ETH as a security, considering this a significant policy move.