SEC Postpones Decision on Grayscale's Ethereum ETF, Stirs Speculation on Crypto Regulations
Summary:
The US Securities and Exchange Commission (SEC) has delayed its decision on Grayscale’s proposed Ethereum (ETH) Future Trust ETF to May 30, from the earlier deadline of March 31. This is not the first time SEC has postponed its decision, it had also done so in December 2023, citing the need for additional public comments. Following the approval of Bitcoin ETFs on January 10, speculation has increased regarding stricter regulations on crypto-based ETFs. The SEC also delayed decisions for BlackRock's iShares Ethereum Trust and Fidelity's Ethereum Fund.
The United States Securities and Exchange Commission (SEC) has once again pushed back the deadline to make a decision on digital asset management firm Grayscale’s proposed Ethereum (ETH) Future Trust exchange-traded fund (ETF). As stated in a document released on March 22, the SEC has moved the March 31 deadline to May 30, to determine Grayscale's Ethereum Futures Trust ETF's approval. The Commission mentioned that it needs a more extended period to approve or reject the proposed rule change and to give due consideration to the issues involved.
The SEC had previously delayed the approval of Grayscale's future ETF product in December 2023, indicating it would solicit more public commentary relating to the ETFs' potential listing. This ensued merely three months after Grayscale proposed the listing and trading of shares of the Grayscale Ethereum Futures Trust ETF under the New York Stock Exchange Arca Rule 8.200-E.
Post the announcement, Bloomberg ETF analyst, James Seyffart, speculated that Grayscale was using its future ETF application as a backdoor strategy to urge the SEC into green-lighting its spot Ether ETF. If Grayscale's application is successful, it could present a compelling case for the approval of its spot Ether ETF.
On January 25, however, the SEC put its decision on Grayscale's spot Ether ETF approval on hold, inviting the public to voice their opinions. Since the approval of spot Bitcoin ETFs on January 10, doubt has grown among experts in the crypto industry about if the SEC will impose stricter regulations on crypto-centric ETFs.
In a recent report by Cointelegraph, John Lo, the founder of Capital, anticipates a heightened examination from the SEC regarding future crypto-based ETFs, especially those concerning Ether. He reasoned that the SEC's approval of Bitcoin ETFs was somewhat forced due to their conflict with Grayscale, which, undoubtedly, the SEC deems a huge defeat.
Additionally, other asset management firms in pursuit of launching their Ethereum ETFs are meeting challenges. As communicated in separate filings on March 4, the SEC's decision on applications from BlackRock for its proposed iShares Ethereum Trust and Fidelity for its Ethereum Fund will face a delay.
Published At
3/23/2024 4:55:07 AM
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