ARK Invest, 21Shares Revise Ethereum ETF Proposal, Remove Staking Plan
Summary:
ARK Invest and 21Shares have revised their spot Ethereum ETF proposal, omitting their previous staking plans. The change, possibly in response to potential SEC feedback, could either be a last-ditch strategic effort to avoid possible rejection. While decisions on spot Ethereum ETFs have been delayed, the SEC must decide on proposals by VanEck on May 23 and ARK and 21Shares on May 24. However, the likelihood of a spot Ethereum ETF approval by late May has fallen from about 70% to 25%.
21Shares and ARK Invest have revised their spot Ethereum ETF proposal, submitted on May 10, notably omitting former staking plans. The latest submission lacks the previously included clause detailing that 21Shares intended to stake some of the fund's assets using reliable, third-party providers. Previously, both companies had included a clause within their February 7 submission that proposed the earning of ETH from anticipated staking reward as fund-generated income. However, the updated filing does not include this section. Rather, it covers wider topics such as slashing penalties, temporary inaccessibility of funds during bonding and unbonding, and potential effects on the ETH price. Erich Balchunas, a Bloomberg ETF analyst, suggests in his Friday post on X that this could be in response to potential feedback from the Securities and Exchange Commission (SEC), despite a lack of official comments. Alternatively, this could be a last-effort attempt or strategic move aimed at limiting chances of rejection from the SEC. ARK Invest and 21Shares had initially submitted applications for a spot Ether Exchange-Traded Fund (ETF) back in September, aiming to offer direct Ether exposure, with its trading base on the Cboe BZX Exchange. This exchange will apply the CME CF Ether-Dollar Reference Rate – New York Variant. 21Shares will act as sponsor, Delaware Trust Company will be trustee, and ARK Investment Management will serve as a undertaker, promoting the shares while Ether assets will be held by Coinbase Custody Trust Company. However, decisions on the spot Ethereum ETF have been postponed repeatedly by the SEC, affecting several other proposals, including those from BlackRock, Franklin Templeton, Grayscale, and Invesco Galaxy. The SEC is compelled to decide on VanEck's proposal by May 23 and ARK and 21Shares' proposal by May 24. The SEC's approval of spot Bitcoin ETFs listing and trading on U.S. exchanges occurred in January. However, optimism for approvals of similar Ethereum schemes has reduced recently. Consequently, Bloomberg ETF analyst Balchunas has cut his estimate of spot Ethereum ETF approval likelihood by the end of May from nearly 70% to about 25%.
Published At
5/11/2024 11:08:14 AM
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