SEC approves stake-free Ethereum ETF proposals
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SEC approves stake-free Ethereum ETF proposals

The absence of staking and the earlier approval of spot Bitcoin exchange-traded funds have sucked much of the excitement out of the SEC’s surprising decision to greenlight spot Ethereum ETFs.

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The US Securities and Exchanges Commission (SEC) recently approved “on an accelerated basis” rule-change proposals from three exchanges looking to list spot Ethereum exchange-traded products. Most observers had expected the SEC to reject the applications on the basis that they were filed as commodity ETFs and the SEC deems Ether (or ETH, the native cryptocurrency of the Ethereum platform) to be a security.

“The approval order leverages research from Bitwise and the SEC examining the correlation between spot Ether prices and the price of regulated Ethereum futures contracts,” says Matt Hougan, chief investment officer at crypto index fund manager Bitwise. “The fact that there is a large, robust and regulated futures market in Ethereum had a big impact on the decision.”

Bryan Amour, Morningstar

Another factor was removal of staking from the filings. Ethereum relies on staking to ensure the security of the network, rewarding users who participate in block production and validation through a portion of newly created ETH.

Higher staked amounts help secure the network further by making it more immune to 51% attacks. A 51% attack is an attack on a cryptocurrency blockchain by an entity or group that controls more than 50% of the network and thus can prevent new transactions from gaining confirmations and to reverse non-confirmed transactions.


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