The landscape for spot Ethereum ETFs in the United States has entered a pivotal phase, with recent developments suggesting a significant shift in the Securities and Exchange Commission’s (SEC) approach. After months of delays and uncertainty, the SEC has reportedly urged exchanges to accelerate updates to their 19b-4 filings, signaling a potential green light before the key May 23 deadline—particularly for VanEck’s application.
This sudden move sent shockwaves through the crypto market. Ethereum (ETH) surged past $3,600, peaking at $3,693—an increase of over 19% within 24 hours—reflecting growing investor confidence in regulatory progress.
Is the SEC’s Move a Strategic Delay?
According to sources cited by CoinDesk, the SEC’s request for expedited 19b-4 updates indicates it may approve these rule change proposals ahead of the May 23 cutoff. One firm in active discussions with the commission noted that while the SEC was previously dragging its feet, there now appears to be momentum toward approval.
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However, this does not guarantee that spot Ethereum ETFs will begin trading immediately. Approval of the 19b-4 filing—submitted by exchanges to introduce new products—is only one part of the process. Issuers must also secure approval for their S-1 registration statements, which detail financial disclosures, operational frameworks, and risk factors. Unlike the 19b-4, the S-1 review has no statutory deadline, allowing the SEC to delay final product launches indefinitely.
Bloomberg Intelligence analysts Eric Balchunas and James Seyffart initially raised their approval odds from 25% to 75% following the news. However, Balchunas later clarified that the 75% probability applies specifically to 19b-4 approval by May 23, not full ETF launch readiness. The S-1 approval could still take weeks or even months.
Understanding the Regulatory Framework
- Form 19b-4: Filed by exchanges to propose rule changes, such as listing a new ETF. It undergoes public comment and SEC review.
- Form S-1: A comprehensive registration document required for public offerings, detailing issuer finances, governance, risks, and pricing.
The distinction is critical: while 19b-4 approval signals regulatory openness, S-1 clearance is essential for actual market access.
Balchunas suggested that the SEC’s abrupt shift may stem from escalating political pressure rather than a change in regulatory philosophy. With the 2025 U.S. presidential election on the horizon, crypto policy has become a bipartisan talking point.
Donald Trump has publicly pledged to support the crypto industry if re-elected, even accepting campaign donations in digital assets. Meanwhile, 12 Democratic senators recently joined Republicans in overturning the SEC’s Staff Accounting Bulletin (SAB) 121—a move seen as aligning with pro-crypto voter sentiment.
Given this climate, the SEC’s push for faster 19b-4 processing may be a tactical maneuver: approve the exchange-level filings to demonstrate progress while stalling S-1 approvals behind the scenes. This “delay-and-drag” strategy allows regulators to manage political optics without committing to immediate product launches.
A Pattern of Delays Leading Up to Now
The path to a spot Ethereum ETF has been marked by repeated postponements.
On May 7, the SEC delayed its decision on Invesco Galaxy’s Ethereum ETF until July 5, citing the need for “sufficient time” to evaluate complex regulatory questions. Over the past two months, similar delays have affected applications from major financial players including Fidelity, BlackRock, Grayscale, Franklin Templeton, ARK 21Shares, and Hashdex.
Each application follows a structured review timeline consisting of four phases: two 45-day periods, one 90-day period, and a final 60-day window—totaling up to 240 days from federal registration. At each stage, the SEC must either approve, deny, or extend its review. Extensions are common; final decisions often land near or at the last possible date.
VanEck’s application holds particular significance as the first to reach the May 23 deadline. Its outcome could set a precedent for all other pending applications. If approved, it would trigger a domino effect across the industry. If rejected, issuers would need to resubmit, restarting the entire 240-day cycle—potentially pushing approvals into late 2025.
Legal experts note that rejection could prompt lawsuits. The precedent was set when Grayscale successfully challenged the SEC in court over its Bitcoin ETF application—a ruling that ultimately paved the way for multiple spot Bitcoin ETFs to launch in early 2024.
Risks and Regulatory Hurdles Remain
Despite growing optimism, regulators and analysts emphasize that spot Ethereum ETFs carry unique risks compared to their Bitcoin counterparts.
The SEC has repeatedly cited concerns about Ethereum’s transition to Proof-of-Stake (PoS), including:
- Potential for staking-related centralization
- Market manipulation vulnerabilities
- Ongoing debate over whether ETH qualifies as a security
Matteo Greco, analyst at Fineqia International, highlighted lingering doubts about liquidity in both spot and futures markets for ETH. He also pointed to the SEC’s historical classification of Ethereum as a possible security in certain contexts—an issue that complicates regulatory clarity.
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Another red flag: unlike during the Bitcoin ETF approval process, the SEC has maintained minimal engagement with Ethereum ETF applicants. There have been no known meetings or feedback loops between regulators and issuers—a sharp contrast to prior precedents and a sign of continued skepticism.
Yet many industry leaders remain confident. Ophelia Snyder, President of 21Shares, stated that Ethereum ETF applications are structurally identical to Bitcoin ETFs—same custodians, same disclosure standards, same legal frameworks. “They are mirror images,” she said.
Global Precedents Add Momentum
While U.S. regulators deliberate, other jurisdictions have moved forward.
In late April 2025, Hong Kong approved multiple spot Ethereum ETFs for listing. Though initial asset volumes remain modest, the move marks a significant milestone in global crypto regulation. It demonstrates that well-structured Ethereum ETFs can operate under clear oversight—a model that U.S. policymakers may find difficult to ignore.
International momentum strengthens the argument that U.S. hesitation risks ceding innovation and capital to offshore markets.
Frequently Asked Questions (FAQ)
Q: What is the difference between a 19b-4 and an S-1 filing?
A: The 19b-4 is a rule change proposal submitted by an exchange (e.g., Cboe) to list a new ETF. The S-1 is a registration statement filed by the issuer detailing financials and risks. Both are required, but only the 19b-4 has a fixed approval deadline.
Q: Why is May 23 important?
A: It’s the final deadline for the SEC to rule on VanEck’s 19b-4 application—the first among all pending Ethereum ETFs. A decision here could influence all other applications.
Q: Can the SEC block an Ethereum ETF indefinitely?
A: Yes—while 19b-4 decisions have deadlines, S-1 approvals do not. The SEC can legally delay S-1 clearance indefinitely, effectively halting product launches even after exchange-level approval.
Q: Has any country already launched spot Ethereum ETFs?
A: Yes—Hong Kong approved several spot Ethereum ETFs in April 2025, making it one of the first major financial hubs to do so.
Q: Could issuers sue the SEC if denied?
A: Absolutely. After Grayscale’s successful lawsuit over its Bitcoin ETF, legal action is now a viable path for Ethereum applicants facing unjustified denials.
Q: How might politics influence the approval?
A: With elections approaching in 2025, both parties are courting pro-crypto voters. Regulatory decisions on Ethereum ETFs could become tools for demonstrating innovation-friendly policies.
Final Outlook
The U.S. may be on the cusp of approving its first spot Ethereum ETF—but challenges remain. While recent signals suggest movement on 19b-4 filings, S-1 delays could prolong uncertainty.
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With political pressure mounting and global precedents set, momentum is building. Whether the SEC acts decisively—or resorts to strategic stalling—will shape the future of institutional crypto adoption in America.