The U.S. spot ETH ETF listing plan is postponed, and the SEC requires a revised S-1 form to be submitted before July 8

US spot Ethereum ETF launch delayed

The US Securities and Exchange Commission (SEC) has postponed the launch of the spot Ethereum exchange-traded fund (ETH ETF) and required issuers to re-launch before July 8 Submit Form S-1. This decision has resulted in the postponement of the planned launch on July 2, with the new launch expected to be in mid-July or later.

Background Overview

In response to changes in the review process of spot Ethereum ETFs, Eric Balchunas, senior ETF analyst at Bloomberg, commented, pointing out the SEC’s latest decision and its impact on market expectations.

Previously, SEC Chairman Gary Gensler told the Senate last month that a spot ETH ETF was expected to be approved “this summer,” giving market participants a clear expected timeframe.

However, this expected timeline was forced to adjust as the SEC required issuers to resubmit Form S-1 by July 8, triggering a re-evaluation of the timing of the ETH ETF’s final approval and listing.

Despite the delay, market expectations for the ETH ETF remain high, with investors and analysts closely monitoring the outcome of the SEC’s review and any further developments that may affect the timing of the ETH ETF’s launch.

SEC Feedback and Next Steps

While reviewing the S-1 Registration Statement for the Spot Ethereum ETF, the SEC decided to return the document to the issuer. The SEC’s move was not motivated by a complete rejection of the issuance plan, but rather by a need for further clarification and improvement of the content of the document. The SEC has attached only a small number of opinions, indicating that the main review work is nearly complete, but there are still some details that issuers need to pay attention to and adjust.

Meanwhile, issuers are now faced with the task of making necessary revisions to Form S-1 based on feedback from the SEC. This process may include further explanation of financial data, a detailed description of how the fund operates, or a fuller disclosure of potential risks. Importantly, issuers need to ensure that all feedback is properly addressed to satisfy regulators.

In addition, since the SEC’s feedback may not resolve all issues at once, issuers may need to prepare for additional rounds of negotiations. This means that after filing an amended Form S-1, the SEC may have further questions or requests, to which issuers must remain flexible and responsive. Each round of revisions and negotiations is a step toward final approval, so issuers must remain patient and maintain open and transparent communication with the SEC.

Details of the latest round of revisions and updates

In the context of the SEC's requirement to resubmit Form S-1, each issuer made key updates to their respective registration statements in June in order to meet regulatory requirements and attract potential investors . Here are some important updates:

Update from Franklin Templeton: Franklin Templeton disclosed a 0.19% sponsor rate in its registration statement, which demonstrates its commitment to operating costs and investments Transparency of investor fees. Additionally, the company has come up with an attractive promotion of six months of free trading for the first $10 billion in assets. This strategy is designed to reduce the initial cost for investors and encourage them to participate in this emerging ETH ETF.

VanEck’s Update: VanEck has also updated its registration statement to disclose a 0.20% sponsor rate. Similar to Franklin Templeton, VanEck has implemented an incentive plan to waive fees on the first $1.5 billion of assets. This kind of offer may attract a large number of investors, especially in the early stages of the fund, helping to quickly increase asset size and establish market influence.

These updates reflect issuers’ proactive strategies in facing SEC scrutiny and market expectations. By adjusting fee structures and offering incentives, issuers not only demonstrate responsiveness to regulatory requirements but also communicate to potential investors the competitiveness and attractiveness of their products. With the Form S-1 refiled and further SEC review, these updates could have a positive impact on the ETH ETF’s final approval and market acceptance.

Seed investment disclosure details

In the lead-up to the spot Ethereum ETF, some issuers also disclosed seed investments in previous rounds of financing. These investments not only provided financial support for the launch of the fund, but also reflected the market’s confidence and expectations for this type of product:

Invesco Galaxy’s seed investment: Invesco Galaxy announced a $100,000 investment on June 17 Seed investment. The investment, made through the purchase of 4,000 shares at $25 per share, shows Invesco Galaxy’s confidence in the successful launch of the ETH ETF and its long-term bullishness on the Ethereum market.

Grayscale’s Mini Ethereum Trust Investment: Grayscale also made a $100,000 seed investment through its Mini Ethereum Trust. The investment, which acquires 10,000 shares at $10 per share, reflects Grayscale’s deep involvement in the Ethereum market and recognition of the potential value of the ETH ETF.

FMR Capital’s Seed Investment: As a seed capital investor in Fidelity, FMR Capital purchased 125,000 shares on June 4 at $37.99 per share, contributing $4.7 million to the trust. This large-scale investment not only strengthens the fund's financial strength, but also demonstrates Fidelity's firm belief in the successful launch of the ETH ETF.

BlackRock’s Seed Funding Report: BlackRock reported $10 million in seed funding for its ETF, a figure that highlights BlackRock’s high regard for the market potential of ETH ETFs and optimism about the fund’s future performance expected.

The disclosure of these seed investments not only adds momentum to the issuance of ETH ETFs, but also provides a positive signal to the market. Investors and market analysts will be closely watching the further development of these funds, as well as their performance during the SEC review process and eventual listing. Market expectations for spot Ethereum ETFs are growing as these funds gradually complete SEC review requirements.

Conclusion

Although the launch of the US spot Ethereum ETF has encountered delays, the market’s expectations for this financial innovation have not weakened. The SEC's prudent attitude and the issuer's positive response demonstrate a common focus on the interests of investors and the healthy development of the market. At the same time, the significant investment from seed investors further proves the market’s confidence in the ETH ETF.

As the review process deepens, the final approval and listing of the ETH ETF will bring new opportunities to investors and is expected to promote the further maturity of the cryptocurrency market. The market is eagerly awaiting the SEC’s final decision and believes that once the ETH ETF is successfully listed, it will mark an important step for Ethereum assets to enter the mainstream financial market.

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