SEC Delays Decision on Grayscale’s Spot Ethereum ETF Proposal
The U.S. Securities and Exchange Commission (SEC) has once again postponed its decision on Grayscale’s proposal for a spot Ethereum ETF, extending the review period until June 23. This delay marks another setback in the approval process for cryptocurrency-based ETFs in the United States.
Grayscale initially filed Form 19b-4 with NYSE Arca in October to seek approval for the transition of its existing Ethereum Trust into a spot ETH ETF. In January, the company successfully converted its Bitcoin Trust into a spot Bitcoin ETF.
The SEC’s decision to delay the approval is based on concerns and amendments that are currently under review. The regulator stated that these modifications require additional time for assessment and resolution of any issues. The revised proposal is undergoing thorough scrutiny to ensure compliance with all regulatory requirements.
Grayscale is not the only entity facing delays in the approval process. Other asset managers, including Franklin Templeton, BlackRock, Fidelity, and VanEck, have also experienced postponements in their ETF applications.
In response to the SEC’s latest action, Grayscale has taken further steps to enhance its application. The company has submitted Form S-3 under the U.S. Securities Act to expand its activities related to the Ethereum ETF offering, demonstrating its commitment to obtaining approval.
The delay in approving spot Ethereum ETFs reflects ongoing regulatory concerns. Analysts suggest that incorporating staking features into some applications could raise potential issues. SEC Chairman Gary Gensler has emphasized that most crypto assets are considered securities, influencing the cautious approach to these ETFs.
Despite the setbacks, the crypto ETF market has seen significant activity. Following the approval of the spot Bitcoin ETF, over $12 billion in cumulative net inflows have been reported. However, Grayscale’s Bitcoin Trust has experienced substantial outflows, with a 50% decrease in managed volume during the current week.
The SEC’s decision to postpone the approval of Grayscale’s Ethereum ETF underscores the regulatory challenges facing cryptocurrency-based ETFs in the U.S. Investors and industry experts will be closely monitoring developments as the June 23 deadline approaches.
