Speculation surrounding the approval of an Ethereum (ETH) spot exchange-traded fund (ETF) has raised expectations among cryptocurrency investors. Following the historic approval and launch of the Bitcoin spot ETF in the United States last January, all eyes were on May 23.rd deadline.
In the most recent development, the U.S. Securities and Exchange Commission (SEC) postponed its decision to approve or reject BlackRock’s Ethereum ETF proposal for a second time. Instead, U.S. regulators are now seeking public feedback on investment products based on the second-largest cryptocurrency.
BlackRock’s iShares Ethereum Spot ETF has not yet been approved.
BlackRock filed for an ETH spot ETF in November 2023. The company’s offering for the iShares Ethereum Trust is designed to closely track Ether’s price performance.
Fidelity, another giant in the asset management industry, submitted a proposal for an Ethereum spot ETF the same month as BlackRock. Other companies, including Franklin Templeton, Grayscale, and Ark Invest, have also applied for exchange-traded products (ETPs) and are awaiting SEC approval.
In January, U.S. regulators postponed a decision schedule on BlackRock’s proposal until March. The committee claimed it had deemed it “appropriate” to appoint a longer investigation period to consider the proposed rule changes for listing and trading shares of the iShares Ethereum Trust and “the issues raised therein.”
Now, in March, U.S. regulators have delayed their decision again. According to Monday’s filing, the SEC is “beginning the process of determining whether to approve or deny the proposed rule changes under Section 19(b)(2)(B) of Proposition 12.”
The commencement of proceedings as described in the document does not mean that the regulator has reached a decision. The SEC considers this action appropriate given “the legal and policy issues raised by the proposed rule change.”
The Commission is beginning a process to allow further analysis of the proposed rule change’s consistency with section 6(b)(5) of the Act. The law requires, among other things, that the rules of a national stock exchange “shall be designed to prevent fraudulent conduct.” ‘Manipulative acts and practices’, ‘to protect investors and the public interest.
U.S. SEC Requests Public Feedback
The regulator decided to seek public feedback, asking commenters to address “the sufficiency of the statements supporting the proposal (…) in addition to any other comments they may submit on the proposed rule change.”
With regard to requested feedback, the document lists six key concerns on which interested commenters can specifically submit their views, along with appropriate data to support them.
Some of the questions in the document include whether the arguments presented by exchanges in support of listing Bitcoin ETPs apply equally in the case of Ether. And whether certain features of the Ethereum ecosystem, such as “concentration of control or influence by a few individuals,” make Ether vulnerable to fraud or market manipulation.
The comment period begins on the date of publication in the Federal Register and continues until 21 days after publication. If you wish to file a rebuttal to someone else’s public filing, you must do so within up to 35 days from the date of publication in the Federal Register.
Analyst’s View of Approval
Previously, ETF experts such as James Seyffart and Eric Balchunas expressed optimism about the approval of an Ethereum ETF in May of this year. As Bitcoinist reported, Seyffart said that following the January delay, a delay would most likely occur in March.
I’m not convinced that a spot ETH ETF will be approved by May 23rd.
I’m just saying that the legal issues and policy environment in DC make a rejection (or a request for a rescission from the SEC) more likely than the general sentiment.
“Blackrock always wins” is a lazy bull argument.
— Jake Chervinsky (@jchervinsky) March 3, 2024
Jake Chervinsky, attorney and CLO at Variant, recently shared his views. Cherbinsky does not rule out approval by May 23.
But he sees D.C.’s legal challenges and policy environment tipping the scale toward denials or repeal requests. Layer consider In other words, if there is a request for a withdrawal from the asset manager and a possible denial, the SEC will write a denial order explaining the reasons. But “there are no ETFs anyway.”
ETH is trading at $3,762.61 in the 1-day chart. Source: TradingView.com
Featured image from Unsplash.com, chart from Tradingview.com