SEC Delays Decision on Spot ETH ETF: Details

The United States Securities and Exchange Commission (SEC) has delayed its decision on spot Ether exchange-traded fund (ETF) application filed by asset management firm VanEck. This delay extends the time period for the SEC to consider the proposal, with a final decision expected by May 23.

In a notice issued on March 20, the SEC stated that it needed additional time to evaluate the proposed rule change, highlighting the complexity of the matter. The extension aims to ensure a thorough examination of the ETF application before reaching a verdict.

As reported earlier by TheCoinRise, the SEC has remained silent when it comes to the approval of spot ETH ETF in the United States, and Bloomberg ETF analyst Eric Balchunas revealed that he has downgraded the likelihood of Ether ETF approval to a mere 35%.

SEC Delays Spot ETH ETFs

The postponement comes in the wake of similar delays in reviewing ETF applications for spot Ether from other entities such as Hashdex and ARK 21Shares. Bloomberg ETF analyst James Seyffart has speculated that these delays may culminate in denials for the Ether ETF applications, with deadlines set for May 2024.

Reports have surfaced suggesting that the SEC is investigating firms allegedly linked to the Ethereum Foundation as part of efforts to determine the regulatory classification of Ether, possibly as a security. The outcome of this investigation could have implications for the approval of Ether ETFs.

Notably, Grayscale and Coinbase are currently engaged in discussions with the SEC for the approval of a spot ETH ETF in the US. 

Ether Futures Applications

Despite the delays in spot Ether ETF approvals, the SEC began greenlighting investment vehicles tied to Ether futures in October 2023, indicating a growing acceptance of Ether as a commodity. The delay in VanEck’s application has also prompted the SEC to open the proposal to public comment, allowing stakeholders to weigh in on the matter.

Notably, the SEC’s decision to allow U.S. exchanges to list and trade shares of spot Bitcoin ETFs in January marked a significant milestone in cryptocurrency regulation. 

SEC Chair and ETH ETFs

However, the call from Senators Jack Reed and Laphonza Butler urging SEC Chair Gary Gensler to reject Ether ETF applications underscores the ongoing debate surrounding the regulatory framework for digital assets. 

The senators expressed concerns over the perceived risks associated with granting approval for Ether ETFs, particularly for retail investors. Fidelity’s spot ETH ETF application was also delayed by the regulator, as confirmed earlier.

As the SEC continues to navigate the evolving landscape of digital asset regulation, the postponement of the VanEck Ether ETF decision underscores the complexities and deliberations involved in evaluating these innovative investment products.