Since the debut of Bitcoin ETFs in January, the cryptocurrency industry has been eagerly anticipating the US Securities and Exchange Commission’s decision on Ethereum. After months of uncertainty, the commission finally approved the 19b-4 forms for spot Ether ETFs in May.

Taha Abbasi, CTO at Ferrum Labs, emphasized the significance of this decision, noting that it is a crucial step towards widespread adoption. “It demonstrates that L1 and related assets are operating as intended and are now officially recognized by regulatory bodies,” Abbasi stated in an interview with crypto.news.

The approval of Ether ETFs has raised questions about how regulators perceive the second-largest cryptocurrency. Is it no longer considered a security? Could it be classified as a commodity instead? The classification of Ether ETFs under the Securities Act of 1933, rather than the stricter Investment Company Act of 1940, suggests a less restrictive regulatory framework.

However, Abbasi cautioned against drawing immediate conclusions, highlighting that the approval of the ETP product does not definitively classify ETH itself. This decision reflects a nuanced regulatory environment that acknowledges the unique characteristics of digital assets.

Abbasi also emphasized the importance of remaining informed about regulatory developments and complying with existing regulations. He noted that SEC Chairman Gary Gensler’s reluctance to clarify ETH’s classification is a strategic move to maintain flexibility and control over the cryptocurrency sector.

One key aspect of the recent approval is the exclusion of staking within Ether ETFs, as the SEC views staking as an unlawful offering by cryptocurrency platforms. Despite this limitation, Abbasi believes that ETP issuers can still attract investors by effectively communicating the strengths of their products and targeting specific investor segments.

While the commission has yet to approve the S-1 registrations for the ETF filings, industry experts anticipate a potential launch in June. However, Abbasi suggested a more realistic timeline of “6 to 18 months” before Ether ETFs become available for trading on exchanges.

In conclusion, staying informed about regulatory developments and actively participating in the public comment process can positively influence the outcome for Ether ETFs. The industry continues to evolve, and market participants should adapt to navigate the changing landscape effectively.