The U.S. Securities and Exchange Commission (SEC) on Monday granted preliminary approval to at least three of eight managers seeking to launch exchange-traded funds (ETFs) tied to the price of the second-largest cryptocurrency, ether, next Tuesday. Citing three informed sources, Reuters reported. The price of ether was close to $3,412 at around 09:00 CET today, showing a 1.7 percent rise over the past day.
Rule changes
Final approval, according to the sources, depends on the submission of final offering documents by the end of this week. All eight bidders are expected to start trading simultaneously, one of the sources added.
The Exchange Commission in May approved rule changes to allow these products to be listed on the exchange, removing one of the hurdles to their admission. Subsequently, the commission also granted requests from Nasdaq, CBOE and NYSE exchange companies. But the funds still need final approval to be allowed to list on the exchange.
Trading on the exchange
Ether is a cryptocurrency operating on the Ethereum blockchain platform. Sometimes the two names are used interchangeably and the name ethereum is also used for cryptocurrency. The SEC considers ether to be more of a security because when verifying transactions in ethereum, market participants deposit a certain amount of ether as collateral and receive a form of dividend in return.
ETFs tied to the price of bitcoin, the largest and most famous cryptocurrency, have been trading on the exchange since January. The SEC, under the leadership of Gary Gensler, is rather sceptical about cryptocurrencies. It has refused to give permission for ETFs linked to their price for years. It approved bitcoin-linked ones only after losing lawsuits.
Source: ČTK
