A person familiar with the filings informed Blockworks that amended S-1s from all potential issuers might be available by late next week. Spot ether ETFs are not launching today and might not enter the market soon.

However, Thursday was a win for crypto fund issuers, especially since many anticipated the SEC would reject such products just a week ago.

In case you missed it, the SEC approved rule changes submitted by the stock exchanges for listing ether ETFs.

Funds with a path to approval now include VanEck, BlackRock, Fidelity, Grayscale, Bitwise, Ark Invest, Franklin Templeton, and Invesco.

Some industry observers noted the decision provides clarity on ether’s status as a commodity.

The SEC approving the 19b-4 documents is a significant step toward launching these funds but not the only one. Next, the SEC needs to approve the registration statements, or S-1s, submitted by the fund issuers.

The potential delay between these actions might be due to the SEC's sudden, politically motivated change of stance. While the Division of Trading and Markets handled the 19b-4 ruling, the Division of Corporation Finance reviews the S-1s.

Increased engagement between the SEC and fund issuers this week suggests the SEC might be catching up. Discussions earlier this week resulted in 19b-4 amendments clarifying that US spot ether ETFs would not stake their holdings.

Ether ETFs are not cleared to launch yet, despite speculation. However, it seems they will eventually be able to trade.

The S-1 approval process involves SEC comments and responses from fund issuers. While the SEC has 240 days to consider 19b-4 proposals, there is no specific deadline for the S-1 review.

A source told Blockworks it's hard to predict the timing of the process, noting the SEC’s Corporation Finance unit has not yet made its view clear on the ether ETF proposals. The SEC did not comment.

Bloomberg analyst James Seyffart said the process could take from two weeks to several months. Fellow analyst Eric Balchunas expects it could take four to six weeks for an SEC comment letter on the ether ETF S-1s.

The SEC’s Division of Corporation Finance worked with prospective spot bitcoin ETF issuers on their S-1s for about three months before approving them in January, Seyffart explained. Bitwise Asset Management’s general counsel Katherine Dowling noted the SEC ensures proper disclosures for the investing public when reviewing S-1s. She expects a similar process for ether products.

VanEck filed an amended S-1 late Thursday, but no other issuers have since the 19b-4 approval. A source expects amended S-1s from other fund groups by late next week. The SEC's comments on these will indicate how long the process could take.

It’s also unclear in what order these funds might launch or if all proposed spot ether ETFs will come to market simultaneously, as the SEC allowed with spot bitcoin ETFs.

VanEck first filed for a spot ether ETF in 2021, with Ark Invest and 21Shares following suit in September. Other fund groups joined later. The SEC’s Thursday 19b-4 approval order stated it would approve all proposals at once to foster competition.

Some observers thought the SEC’s unclear stance on whether ETH is a security or commodity could hinder ether ETF approval. In 2018, SEC’s then-director William Hinman said current ether transactions are not securities. SEC Chair Gary Gensler did not clarify ETH’s status in April 2023. Variant’s Chief Legal Officer Jake Chervinsky said SEC approval of spot ether ETFs would likely indicate unstaked ETH is not a security.

While the 19b-4 order doesn’t explicitly state the SEC’s stance, the products are registered as commodity-based trust shares. A Consensys spokesperson said the approval signals the SEC views ETH as a commodity, contrary to its previous stance. Consensys filed a lawsuit against the SEC last month over its regulation of ETH as a security.

Despite welcoming the ether ETF approval, the Consensys representative criticized the SEC’s inconsistent approach to digital assets. They emphasized the need for clear regulation.

Coinbase’s Chief Legal Officer Paul Grewal also saw regulatory clarity in the 19b-4 order, stating ETH is deemed a commodity. The SEC sued Coinbase last year for allegedly engaging in unregistered securities offerings. Coinbase noted the ether ETF approval in its latest request to file an interlocutory appeal.