This marks a significant step forward for the crypto community, as the approval will allow crypto platforms including BlackRock, Fidelity, Invesco, and Art Invest to launch ETFs that invest in ether, cryptocurrency of the ethereum blockchain.

A second round of approvals will be required for the motion to officially move forward. This move does not guarantee that the rule changes will be fully implemented, as SEC chair Gary Gensler stated previously that the reluctance to instate further regulation is due to the ongoing fraud among its leaders.

Gensler commented: “It comes down to the rampant non-compliance with US law. It comes down to fraud and scams. This is a field where some of the leading lights of the field are either now in jail, awaiting jail, awaiting extradition.”

Earlier this year, the SEC approved 11 bitcoin spot ETFs.

Alex Saleh, head of partnerships at Coincover, comments: “The SEC’s move is another sign of the growing appetite for crypto ETFs and could introduce fresh demand pressure on Ethereum spot prices, since exposure to Ethereum would be opened to a wider pool of investors.

“This is an exciting moment for the crypto community, but there are still risks that come with any new financial instrument. Volatility is a given, and widespread adoption of Ethereum ETFs would lead to fund managers accumulating large amounts of Ethereum across a range of custody methods. This will be a prime target for hacks, attacks, and possible human error. We anticipate greater expectations around risk mitigation and security capabilities, meaning security is paramount and must be a top priority for ETF managers.”