The permission would enable cryptocurrency platforms like BlackRock, Fidelity, Invesco, and Art Invest to introduce exchange-traded funds (ETFs) that invest in ether, a cryptocurrency on the ethereum blockchain, which represents a major advancement for the cryptocurrency community.

It will take a second round of approvals before the motion can be formally moved forward. This action does not ensure that the rule modifications will be completely applied because SEC head Gary Gensler has said that the organization's officials continue to engage in fraud, which is the reason why more regulation is reluctant to be imposed.

"It comes down to the rampant non-compliance with US law," said Gensler. Scams and fraud are the main issues. Some of the top professionals in this industry are either already incarcerated, awaiting incarceration, or awaiting extradition.

Eleven bitcoin spot ETFs were authorized earlier this year by the SEC.

As exposure to Ethereum would be offered to a larger pool of investors, Alex Saleh, head of partnerships at Coincover, says: "The SEC's move is another sign of the growing appetite for crypto ETFs and could introduce fresh demand pressure on Ethereum spot prices."

"The cryptocurrency community is experiencing an exciting time, but like with any new financial product, there are hazards. There will inevitably be volatility, and if Ethereum ETFs become widely used, fund managers will likely accumulate significant Ethereum holdings using a variety of custodial strategies. This will be an easy target for assaults, hackers, and potential mistakes made by people. We demand higher standards for risk mitigation and security skills, thus ETF managers need to prioritize security above all else.