SEC Expected to Reject Spot Ether ETFs in May, While Hong Kong Moves Forward
Summary:
The US Securities and Exchange Commission (SEC) is expected to reject applications for spot Ether (ETH) exchange-traded funds (ETFs) in May, according to an upcoming report. Unnamed sources suggest that recent meetings between the SEC and companies applying for spot Ether ETFs have been unbalanced, with little detailed discussion on the proposed products. Analysts predict further delays in the possible approval of Ether ETFs, potentially until later in 2024 or beyond due to an unclear regulatory landscape. Meanwhile, in contrast to the potential halt in the US, other jurisdictions, particularly Hong Kong, are progressing with plans to introduce crypto ETF products this month.
A forthcoming report suggests that the US Securities and Exchange Commission (SEC) is likely to reject applications for spot Ether (ETH) exchange-traded funds (ETFs) in May. On April 24, Reuters revealed that following recent meetings with the SEC, organizations that issue US securities and other associated firms anticipate that applications for spot Ether ETFs will get denied next month. This information comes from four individuals who attended the meetings but wished to remain unidentified due to the private discussions being held.
These sources stated that recent conversations between the SEC and the issuers have been quite unbalanced, and the SEC has not shared any meaningful details about the planned products. They contrasted these fruitless discussions on Ether ETFs with the conclusive talks between issuers and the SEC in January. This was just weeks before the SEC granted approval to spot Bitcoin ETFs, something it had refused to do for more than ten years until Grayscale Investments defeated the regulator in court in August 2023.
Most industry analysts believe that the SEC will probably postpone any approval of Ether ETFs further. Todd Rosenbluth, a data analyst at VettaFi ETF, was reported saying that "approval is likely to be delayed well into 2024 or beyond" because the regulatory landscape remains "murky." Eric Balchunas, a Bloomberg ETF analyst, speculated in March that the odds of the SEC approving a spot Ether ETF in May were about 35%. He observed that the SEC appeared to be deliberately ignoring potential fund issuers, according to the credible information he had.
Balchunas also pointed out that the SEC Chair Gary Gensler's interpretation of Ether could affect the result as Gensler avoided clarifying whether Ether is a security.
In contrast to the anticipated delay in the US, worldwide jurisdictions are advancing with their plans to introduce ETF products. Hong Kong's Securities and Futures Commission (SFC) officially endorsed the first batch of spot Bitcoin (BTC) and Ether ETFs on April 24. These included three BTC and three ETH ETFs from China Asset Management's (ChinaAMC), Harvest Global Investments, and Bosera. Following this approval, it is expected that Hong Kong's crypto ETFs will begin trading on April 30.
Published At
4/25/2024 2:03:29 PM
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