Latest news, SEC delays decision on Grayscale Ethereum ETF

The U.S. Securities and Exchange Commission (SEC) has announced an extension of the decision-making deadline for the Ethereum Spot Trust exchange-traded fund (ETF) proposed by asset management company Grayscale. The proposal was originally published for public comment in the Federal Register on October 3, 2023. The SEC extended the deadline to provide sufficient time to consider proposed rule changes.

Grayscale Spot Ethereum ETF Final Deadline

According to a document disclosed on March 22, the SEC will extend the decision-making process for the spot Ethereum ETF proposed by Grayscale. The commission has postponed the deadline for approving the investment product from March 31 to May 30.

Part of the SEC filing reads as follows:

In order to allow sufficient time to consider the proposed rule change and related issues, the Commission believes it is necessary to specify a longer period for issuing an order approving or denying the proposed rule change. Therefore, in accordance with section 19(b)(2) of the Act, the Commission has decided to set May 30, 2024 as the deadline for approval or rejection of proposed rule changes.

Bloomberg ETF analyst James Seyffart is not surprised by the extension of the Grayscale Ethereum Spot ETF application deadline. Seyffart said in his post on the X platform: "As we expected, Grayscale's Ethereum spot ETF application has been delayed again."

In November last year, Seyffart said that he was skeptical about Grayscale’s application for an Ethereum spot ETF, believing that it was just a means to obtain authorization for its spot ETH trading products. Therefore, it will become even more compelling to observe the impact of the latest extension on spot ETH ETF approvals, especially considering that the likelihood of approval in the first place is very low.

In early January, the SEC delayed its decision to approve the Grayscale Spot Ethereum ETF and began soliciting public comment. The latest news shows that the asset management company has revised its 19b-4 form to prompt regulators to make a decision as soon as possible.

Alex Thorn believes that The possibility of ETH spot ETF being approved is very small

Alex, Head of Research at Galaxy Digital Thorn said that at this time, the approval of an Ethereum spot ETF seems very unlikely. This judgment is based on SEC subpoenas against crypto companies and a lack of engagement with potential ETF issuers.

According to a recent report, the SEC issued subpoenas to various crypto companies regarding their ties to the Ethereum Foundation.

Thorn believes that the SEC may be investigating whether the original Ethereum ICO (initial coin offering) was an unregistered securities offering, rather than classifying today’s secondary transactions in Ethereum as securities transactions.

The analyst mentioned that it is unclear how the investigation itself affects the ETH ETF’s chances of approval. However, he believes that when combined with the fact that the SEC is not actively communicating with applicants, the likelihood of an ETF being approved in May is very slim.

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