Why Did the SEC Suddenly Change Its Mind on Ethereum ETFs？ An Inside Source Reveals the Real Reason

The US Securities and Exchange Commission (SEC) is reportedly on the verge of approving spot Ethereum exchange-traded funds (ETFs). This sudden change left companies trying to understand the SEC's change of attitude in a difficult situation.

Just two weeks ago, the SEC showed no interest in the filings, according to a source familiar with the matter. However, on Monday, the SEC's trading and markets division notified exchanges that they would approve 19b-4s this week. This news coincides with reports from Barrons' SEC staff indicating a trend toward approval.

The source described the situation as “completely unprecedented” and suggested that this U-turn was “purely political”. This speculation stems from a lack of internal coordination within the SEC. While the trading and markets division is preparing to approve 19b-4s, the corporate finance division, which is responsible for S-1s, appears out of sync on this issue.

The source also speculated that the SEC's change of heart could be politically motivated, given the fast-approaching elections. Former President Donald Trump, who recently backed crypto, told a crowd of NFT buyers, “If you love cryptocurrencies in any form, you better vote for Trump.”

The source believes this could become a campaign issue, especially since Democrats desperately need the youth vote. The source suggested that President Joe Biden could score a win with the approval of spot ETH ETFs and position himself as a leader going forward.

The next step involves updating the 19b-4 forms once comments are received from the SEC. Given the tight deadlines, comments on 19b-4s are expected to be light. The source emphasized the urgency of the situation, likening the SEC's efforts to “writing a term paper the night before the deadline.”

*This is not investment advice.