The United States Securities and Exchange Commission implicitly accepted Ether ( ETH ) as a commodity when it approved ETH futures exchange-traded funds (ETFs) last year — meaning a spot ETF variant is likely set for this year — according to Bloomberg ETF analyst James Seyffart.

Speaking during CryptoQuant’s private webinar on Jan. 4, Seyffart alluded to the approval of Ether futures ETFs in October 2023, noting that the SEC did not challenge the coin’s classification through the ETF registration process with the Commodity Futures Trading Commission (CFTC).

“The CFTC is blatantly calling Ethereum a commodity. They do not call them securities. [...] The SEC has approved Ethereum futures ETFs. So again, Gary Gensler will not explicitly say whether Ethereum is a security or a commodity, but in their action, by approving those Ethereum futures ETFs, they’re implicitly accepting those Ethereum futures as commodities futures.”

 Seyffart said the SEC likely had no bandwidth to dispute the classification.

The first Ether futures ETFs in the U.S. were listed for trading on Oct. 2 , with several investment firms launching a total of nine funds on the Chicago Board Options Exchange, including ProShares, VanEck, Bitwise, Valkyrie, Kelly and Volshares. According to Seyffart, the SEC could find itself in court and have to unlist futures ETFs if it were to deem Ether a security.

The classification matters since securities and commodities ETFs face different legal requirements, with different taxes and regulatory burdens attached to securities.

Here we go … expect more spot #ethereum ETFs filings in the coming days.

NOTE: this is an S-1 and not a 19b-4. Which means it does not start a clock in any way … yet. Expect 19b-4’s soon. https://t.co/sNus2vr5qV

— James Seyffart (@JSeyff) September 6, 2023

“It wouldn’t just be the SEC going against the crypto industry. If they call Ethereum a security, it’ll be going against their sister regulator, CFTC. [...] That’s why I think we could see potential Ethereum ETFs approved this year as well,” the analyst noted.

The SEC recently lost a court case under a similar dispute in which it exempted the Spikes Index — a stock volatility index — from the definition of security futures under claims of promoting competition among such indexes. “There’sr precedent here to say it matters how these things are registered,” said Seyffart.

The SEC has a final decision deadline for VanEck, ARK 21Shares and Hashdex’s spot Ether ETF in May 2024, with other decision deadlines coming in the months following.

Before then, however, the regulator must disclose its verdict on spot Bitcoin ( BTC ) ETFs. Seyfartt predicts an approval by Jan. 10 , with $10 billion flowing into Bitcoin ETFs within 12 months.

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