SEC Delays Decision On Spot Ethereum ETFs

SEC Delays Decision On Spot Ethereum ETFs

Following the same pattern as spot Bitcoin ETFs, the US Securities and Exchange Commission (SEC) has delayed its decision on the applications of spot Ethereum exchange-traded funds (ETFs).

These applications include one submitted by the largest asset manager in the world, BlackRock, and one by Grayscale Investments, which wants to convert its existing Ethereum Trust into an ETF.

The delay

Despite the approval of 11 spot Bitcoin ETF applications in this month, the securities regulator opted to turn down two applications for a spot Ethereum ETF.

Investors are keeping a close eye on the SEC regarding any potential decisions it might make on proposals of spot Ethereum ETFs.

On Wednesday, the SEC turned down an application of listing and trading shares of the iShares Ethereum Trust of BlackRock, which had been submitted by the Nasdaq Stock Market.

On November 21st, 2023, the application in question had been filed and on December 11th, it had been published in the Federal Register for comment.

The SEC stated that it believes a longer period is required for deciding what action to take related to the proposed rule change.

It further asserted that it would take a decision about whether to approve or disapprove spot Ethereum ETF applications by March 10th, 2024.

Spot Bitcoin ETFs

On January 10th, 2024, the Commission approved 11 spot Bitcoin ETF applications, which included Grayscale’s application to convert its GBTC (Grayscale Bitcoin Trust) into an ETF.

Most of the spot Bitcoin ETFs that had received approval started trading the next day. In terms of trading volumes of the spot Bitcoin ETFs in the market, two clear leaders have emerged.

These include the Ishares Bitcoin Trust (IBIT) of BlackRock and Fidelity’s Wise Origin Bitcoin Fund (FBTC). Meanwhile, Grayscale has seen a considerable outflow from its newly converted spot Bitcoin ETF.

The details

On Thursday, the securities regulator also decided to delay its decision about Grayscale’s application of converting its Ethereum Trust into an ETF.

A proposed rule change had been filed by NYSE Arca for listing and trading shares of the Grayscale Ethereum Trust.

The application was submitted to the regulatory body last year on October 10th. The SEC had already delayed its decision on the application on September 5th.

According to the announcement by the regulator, it has decided to delay for performing additional analysis on the rule change that has been proposed.

In addition, the SEC is also looking for comments regarding the proposed rule change. The securities watchdog said that it wants interested persons to share their comments on the matter.

This would also help the regulatory body in deciding whether to approve or disapprove the proposed rule change.

The deadline for submitting the comments is 21 days after the publication date in the Federal Register. As for rebuttals to submissions, they need to be filed within 35 days of publication.

Similar delays had also occurred in the matter of spot Bitcoin ETF applications, but the securities regulator eventually gave its approval.