The Securities and Exchange Commission has all but fully approved the trading of securities based on ether, a form of cryptocurrency. Many experts expect this to soon open the door to ether ETFs, or exchange-traded funds.

The security would be in what’s called a spot ether ETF. So instead of directly buying the cryptocurrency, you’d have someone do it for you. Specifically, an asset manager.

“It really takes some of the friction out of the process,” said Ari Redbord, head of policy for TRM Labs. 

Normally you have to create a crypto wallet and use an exchange.

“Here, you’re doing it through traditional investment mechanisms,” Redbord said — like a brokerage account or financial adviser who might already manage your savings.

Redbord, who investigates the use of crypto in money laundering, said having people invest through an ETF could cut down on that activity. 

“That space is highly regulated already,” he said.

Ether works a little different from bitcoin, a more popular cryptocurrency — coin transactions are verified by a subset of the people who hold them. That may have made the SEC uncomfortable, said Jack Graves, a teaching professor at Syracuse University College of Law.

“I think there have been concerns about potential control or manipulation,” he said.

Could the value of the coin be manipulated by a small group of people in charge of verifying the coins? Tools had to be developed to watch out for that. 

“That ended up being the hook wherein the SEC was able to get to a place of more comfort,” said Katherine Dowling, chief compliance officer at Bitwise Asset Management, which provided research to the SEC on how fraud could be detected.

A few more steps have to be taken before people can buy and sell spot ether ETFs, but when it happens, Dowling said, a lot more people will be able to trade the currency. According to data firm FactSet, since ether’s crypto cousin bitcoin became available as a spot ETF in January, people have invested $15 billion into it.