Gary Gensler Spot Ether ETFs

YEREVAN ( — Gary Gensler, chair of the U.S. Securities and Exchange Commission (SEC), may cast the deciding vote on spot Ether exchange-traded funds today.

In January, the SEC’s five-commissioner panel voted on spot Bitcoin ETFs. Hester Peirce and Mark Uyeda, who support crypto, voted in favor. Caroline Crenshaw and Jaime Lizárraga voted against it. Gary Gensler cast the deciding vote, resulting in a 3-2 approval on January 10, 2024.

Final SEC Commission votes for the spot Bitcoin ETF. Source: SEC
Final SEC Commission votes for the spot Bitcoin ETF. Source: SEC

The same five SEC Commissioners will vote on VanEck’s spot Ether ETF on May 23. Here’s what we know about them.

Hester Peirce

Hester Peirce, nicknamed “Crypto Mom,” is well known for her positive stance on digital assets and support for decentralizing the financial system. Although she hasn’t revealed her vote on the spot Ether ETFs, she remains deeply engaged with the Ethereum community. In late February, she attended and spoke at ETHDenver, showcasing her involvement.

Peirce has criticized the SEC’s oversight of the cryptocurrency industry, calling some parts of its approach “unproductive” and “pointless.” Her stance reflects her desire to see a more decentralized and resilient financial system.

Caroline Crenshaw

Caroline Crenshaw is a critic of the cryptocurrency industry and was a vocal dissenter in the spot Bitcoin ETF decision. She argued that the price of spot Bitcoin ETFs would be affected by fraud and market manipulation in the broader industry. Crenshaw believed that by approving these products, the SEC would fail to protect U.S. investors.

Caroline Crenshaw. Source: SEC
Caroline Crenshaw. Source: SEC

There is no sign that Caroline Crenshaw has changed her view on spot crypto ETFs. She has criticized the lack of systemic oversight and the inadequate measures to prevent fraud and manipulation in these markets. Crenshaw pointed out that spot trading is fragmented and spread across various international venues, many of which are not properly regulated.

Mark Uyeda

Mark Uyeda, like Hester Peirce, has criticized the SEC’s “regulation by enforcement” approach to cryptocurrency. He opposed the SEC’s decision to deny a Coinbase petition last December, which accused the agency of arbitrary rulemaking. Uyeda voted to approve spot Bitcoin ETFs but expressed “strong concerns” about the decision process, claiming the SEC deviated from its “significant market” test used for exchange-traded products.

Mark Uyeda (right) speaking at Milken Institute conference. Source: Eleanor Terrett
Mark Uyeda speaking at Milken Institute conference. Source: Eleanor Terrett

Uyeda described the SEC’s reasoning as “flawed” but cited “independent reasons” for his vote in favor of the spot Bitcoin ETFs. However, he has not clarified what those reasons were, leaving uncertainty about whether they will apply to spot Ether ETFs. His critical stance reflects ongoing tensions within the SEC over cryptocurrency regulation and the need for clearer guidelines.

Jaime Lizárraga

Jaime Lizárraga voted against approving spot Bitcoin ETFs and did not issue a statement afterward. In a November 2022 speech at Brooklyn Law School, he argued Bitcoin hadn’t fulfilled its promise as a viable alternative to traditional finance or genuine financial inclusivity. He opposed the SEC’s “regulation by enforcement” approach to cryptocurrency regulation.

Jaime Lizárraga. Source: SEC
Jaime Lizárraga. Source: SEC

Lizárraga believes most cryptocurrencies fall under U.S. securities laws and thus operate illegally. There is no indication he has changed his views since the spot Bitcoin ETFs were approved.

Gary Gensler

Gary Gensler, chair of the SEC, will cast the deciding vote on the spot Ether ETF applications this week. Despite his earlier vote to approve spot Bitcoin ETFs, it is anticipated that he will not approve the spot Ether ETFs.

Gensler’s expected decision against the Ether ETFs stems from several concerns. First, there are ongoing regulatory uncertainties surrounding Ether’s classification. The SEC is currently investigating whether Ether should be considered a security, which complicates the approval of any related financial products.

Additionally, Gensler has voiced apprehensions about market manipulation and the lack of robust oversight in the cryptocurrency space. These concerns are heightened by the fragmented nature of spot trading across various international platforms, many of which operate with minimal regulation.

In a May 7 interview with CNBC, Gensler confirmed the SEC is still reviewing the decision, stating,

“That’s something in front of our commission right now. We’re a five-member Commission, and those filings will take up at the appropriate time.”

This cautious stance, combined with the broader regulatory environment and the specific issues surrounding Ether, leads to the expectation that Gensler will vote against approving the spot Ether ETFs.

Deadlines for the Ether ETF applications before the SEC. Source: James Seyffart
Deadlines for the Ether ETF applications before the SEC. Source: James Seyffart

Meanwhile, SEC Division of Enforcement director Gurbir Grewal is leading an investigation into Ether’s status as a potential security.

Some fund managers claim the SEC has been less engaged with spot Ether ETFs. A lawyer for Bitwise mentioned that some fund managers now anticipate an SEC denial this week.

Nate Geraci, President of The ETF Store, noted that the SEC might approve the 19b-4 applications (exchange rule changes) but delay the S-1 applications (registration statements), preventing an immediate launch.

Source: Nate Geraci
Source: Nate Geraci

Bloomberg analysts Eric Balchunas and James Seyffart predict a 25% chance of at least one spot Ether ETF being approved on May 23, down from 70% in January.

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