Spot Eater ETFs come down to 5-person vote: Gensler the decider?

The fate of the ethereum (ETH) exchange-traded currency could be decided by a unanimous vote this week by United States Securities and Exchange Commission Chairman Gary Gensler — if history is any indication.

In January, approval of spot Bitcoin ETFs came down to a five-commissioner panel. Two crypto-friendly commissioners, Hester Pearce and Mark Uyeda, voted to approve the EFF, while commissioners Caroline Crenshaw and Jaime Lizarraga voted against it.

Gensler also approved the vote, leading many to believe that the vote finally secured the approval of spot Bitcoin ETFs, which were approved on January 10, 2024 by a 3-2 vote.

This week, the same five SEC commissioners are set to vote on whether to approve or deny VanEck's spot Ether ETF on May 23. Here's what we know about them.

Hester Pierce

Peirce earned the nickname “Crypto Mom” ​​for a reason — she's bullish on digital assets and wants to see more decentralization integrated into the broader financial system.

She did not confirm how to select Ether ETFs in place.

However, she made herself part of the Ethereum community by attending ETDenver in Colorado in late February.

Peirce has previously criticized the SEC's approach to regulating the cryptocurrency industry, calling parts of the securities regulator's approach “unproductive” and “useless.”

Caroline Crenshaw

Crenshaw is a strong critic of the cryptocurrency industry and was a strong opponent of the Bitcoin ETF decision.

At the time, Crenshaw said that the price of the spot Bitcoin ETF was affected by market manipulation and market manipulation in the broader industry – and that by approving Bitcoin products, the SEC failed to protect American investors.

There is no evidence to suggest that Crenshaw has since changed her mind about the spot crypto ETF.

“There are no systematic controls or other adequate mechanisms to detect and prevent fraud and fraud in these markets,” Crenshaw said of his opposition to the spot Bitcoin ETFs.

“[Spot trading] “It is fragmented and scattered across different global trading areas, and many markets are not meaningfully regulated,” she added.

Mark Uyeda

Aside from Pearce, Ueda is the only other commissioner to have called the SEC's “implementation regulation” into the cryptocurrency industry.

Last December, he disagreed with the SEC's decision to deny Coinbase's petition, citing the agency's arbitrary and capricious behavior in refusing to tailor rules to explain its oversight of the industry.

Uyeda voted to approve the position of the Bitcoin ETF, but expressed “strong concerns” with how the SEC reached its decision.

The commission said it is deviating from the “significant market” test it used to determine exchange-traded products, instead approving bitcoin ETFs under “other means.”

Uyeda described the SEC's reasoning as “wrong” but cited “independent reasons” behind his decision to vote in favor of Bitcoin ETFs.

However, it is not clear what those “independent factors” are, let alone whether they apply to distinguish Ether ETFs as well.

Jaime Lizaraga

Lizarraga voted against approving the Bitcoin ETFs position and was the only commissioner not to make a statement after the decision.

However, in a November 2022 speech at Brooklyn Law School, he said Bitcoin's promise as a “viable alternative to traditional finance” and “true financial inclusion” had not yet arrived.

At the time, the SEC opposed the idea that it would adopt a “rule by law” approach to the cryptocurrency industry.

He also believes that most cryptocurrencies are subject to US securities laws, and as a result are operating illegally.

There is no evidence to suggest that these views have changed since Bitcoin ETFs were approved.

Gary Gensler

When Gensler voted to approve Bitcoin ETFs in January, some speculated that he was forced to do so because Grayscale won an appeal against the regulator months earlier.

There's no telling if the current string of Ether ETF applications will be approached in the same way.

Earlier this month, Gensler confirmed in a May 7 interview with CNBC that the SEC's decision is still under review:

“It is now before our commission. We are a five-member commission, and those records will be taken in due course.

Gensler has also recently been accused of evading answers about whether or not Ether is a security – even when asked by Congress.

Meanwhile, there are other possible wrinkles in the work. There is an investigation into Ether's status as a security – led by SEC Enforcement Director Gurbir Grewal.

A few fund managers say the SEC has been less involved in spot ETFs. A lawyer for one of those applicants, Bitwise, said some fund managers now expect an SEC rejection this week.

Related: Gary Gensler's Resignation ‘Troll' Post Depresses CryptoX

Recently, ETF Store President Nate Geracchi said that technically the SEC is approving 19b-4 filings (exchange rule changes) but delaying S-1 filings (registration statements), preventing the immediate start.

Bloomberg ETF analysts Eric Balchunas and James Seifert predict a 25% chance of at least one Ether ETF being approved by May 23 – a figure down from 70% since January.

Magazine: Crypto Regulation: Does SEC Chairman Gary Gensler Have Final Comments?