SEC paves way for ethereum ETFs in boost for crypto

The U.S. Securities and Exchange Commission (SEC) has approved rule changes that could lead to the launch of Ethereum ETFs, following earlier approvals for Bitcoin ETFs. This decision involves major financial groups like BlackRock, Fidelity, and others, although a second approval round is still required.

The news has significantly boosted Ethereum's price, with increases of over 20% in a week and 60% year-to-date. The SEC’s move marks a major regulatory shift, indicating a potential openness to more cryptocurrency-based investment products in the U.S. market.

The legal issues surrounding FTX founder Sam Bankman-Fried are directly linked to SEC Chair Gary Gensler's concerns about the broader cryptocurrency industry, which he voiced at an Investment Company Institute conference25. Gensler highlighted the "rampant non-compliance with US law" and the prevalence of "frauds and scams" within the crypto sector. He specifically mentioned high-profile cases like that of Bankman-Fried, who was sentenced to 25 years in prison for his role in a massive fraud involving his cryptocurrency exchange, FTX. This case exemplifies the types of regulatory and legal challenges that Gensler pointed out as being endemic in the crypto industry5. These issues are significant because they underscore the risks and the need for stringent oversight and regulation, which Gensler emphasized in his comments5. His remarks reflect a cautious approach to approving new crypto investment products, such as ETFs, to ensure they meet the regulatory standards that protect investors from similar frauds5.