The Chair of the Securities and Exchange Commission informed senators during a budget hearing that the applications for ether spot ETFs should be completed by this summer.
SEC Chair Gary Gensler indicated that the approval of ether ETFs is essentially complete, with only registration details needing finalization at the staff level.
Gensler also reiterated his criticisms of the noncompliant cryptocurrency industry, avoided confirming whether ETH is classified as a commodity, and expressed doubts about the CFTC’s readiness to regulate crypto markets.
Additionally, CFTC Chair Rostin Behnam discussed the agency’s initiative to prohibit election contracts in prediction markets.
SEC Chair Gary Gensler informed senators during a budget hearing on Thursday that the final approvals for exchange-traded funds (ETFs) trading Ethereum’s ether (ETH) should be completed this summer.
Gensler informed a subcommittee of the Senate Appropriations Committee, during a hearing justifying the market regulator’s budget, that the process is “working smoothly” following the initial approval of a group of ETFs. He stated that the SEC had previously granted the initial round of applications, and the final registration requirements, known as S-1 filings, are now being managed at the “staff level.”
Once those filings are approved, the new ETFs can be listed, allowing wider market access to easily tradable funds that hold actual ether, similar to the previously established bitcoin spot ETFs. The SEC had initially blocked efforts to approve bitcoin ETFs until a federal court ruled that the agency mishandled the matter. Since then, Gensler has stated that the SEC has been adhering to the court’s decision and allowing bitcoin ETFs.
When asked directly whether ETH is a commodity, Gensler avoided giving a definitive answer, reflecting the SEC’s ongoing uncertainty about the asset. In contrast, at the same hearing, CFTC Chair Rostin Behnam responded affirmatively, stating that ETH is a commodity.
The question of which U.S. watchdog oversees various tokens is crucial. The SEC will supervise securities tokens, while the CFTC will regulate the rest. Although Gensler has frequently stated that most digital assets should be classified as securities, he has avoided specifying which ones, aside from those identified in enforcement actions.
“While not all crypto are crypto securities – some are under Chair Behnam’s jurisdiction – those that are have an obligation to disclose to the public,” Gensler said, reiterating his stance that most tokens remain unregistered and are in violation of securities law.
Gensler, who has chaired both the SEC and the CFTC, criticized the crypto industry for “thumbing its nose” at the rules. He also suggested that the CFTC is not currently equipped to oversee a disclosure-based regulatory system, which is the SEC’s domain.
Behnam was questioned about prediction markets, which are popularized by firms like PredictIt, Polymarket, Zeitgeist, and Kalshi, and the CFTC’s stance on contracts predicting election outcomes. Recently, his agency took steps to block such contracts.
Behnam highlighted that the CFTC currently lacks some necessary authorities to effectively regulate crypto markets, even if legislative efforts in Congress expand its oversight responsibilities in that area.
“We don’t have those traditional regulatory tools – registration, custody, surveillance, oversight – that have been critical in making American capital markets and derivative markets robust,” he explained, emphasizing that the CFTC would require increased funding to develop these capabilities.
Behnam was questioned about prediction markets operated by firms like PredictIt, Polymarket, Zeitgeist, and Kalshi, and his agency’s position on contracts predicting election outcomes. Recently, the CFTC took action to prohibit such contracts.
“The last thing we need right now is to commoditize elections,” Behnam stated. “In my view, this clearly violates existing law, and we’re taking steps to ensure these contracts are banned.”
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