Franklin Templeton’s Ethereum ETF Listing Shocks Industry Amid SEC Uncertainty

Franklin Templeton’s Surprise Listing of Ethereum ETFs on DTCC Amid SEC Uncertainty

In a surprising turn of events, Franklin Templeton has listed its Ethereum ETFs on the Depository Trust and Clearing Corporation (DTCC) despite rumors suggesting that the U.S. Securities and Exchange Commission (SEC) may reject Ethereum-based ETFs on the upcoming May 23rd deadline.

The “Franklin Ethereum TR Ethereum ETF,” with the code EZET, has been added to DTCC, indicating that the ETF is eligible for creation and redemption, essential components for maintaining its market price in line with its net asset value.

However, this listing does not guarantee approval from the SEC for the spot Ethereum ETF, which will be decided next month. Franklin Templeton’s move aligns the company with other industry leaders in the Ethereum ETF market, such as BlackRock, Grayscale, VanEck, and ARK Invest.

The SEC’s hesitation towards approving Ethereum ETFs may stem from Chair Gary Gensler’s reluctance to clarify whether Ether is a security. Analysts suggest that a potential rejection could lead to a legal challenge, similar to the one that prompted the SEC to reconsider Grayscale’s application for a spot Bitcoin ETF.

The uncertainty surrounding Ethereum ETFs has been heightened by recent meetings between issuers and the SEC, which reportedly lacked engagement from the regulatory agency. Bloomberg ETF analyst Eric Balchunas estimated a mere 25% chance of approval for spot Ethereum ETFs, indicating a stark contrast to the detailed discussions that led to the approval of spot Bitcoin ETFs in January 2024.

As the industry awaits the SEC’s decision on Ethereum ETFs, Franklin Templeton’s bold move to list its ETFs on DTCC has added an unexpected twist to the narrative, leaving many wondering about the future of Ethereum-based investment products in the U.S. market.