Spot Ethereum ETF Proposal by Grayscale Delayed Again
Highlights
- SEC delayed Grayscale's spot Ethereum ETF decision until June 23.
- Grayscale's Bitcoin ETF has garnered over $12 billion in inflows.
- Grayscale Bitcoin Trust lost 50% of its volume this week.
The U.S. Securities and Exchange Commission (SEC) postponed its decision regarding Grayscale‘s proposal for spot Ethereum ETF. The SEC prolonged the review period to June 23. This ruling represents another postponement in the approval process of ETFs based on cryptocurrency in the US.
Grayscale filed Form 19b-4 with NYSE Arca in October to approve the transition of its current Ethereum Trust into a spot ETH ETF. In January, Grayscale converted its Bitcoin Trust into a spot Bitcoin ETF.
Grayscale Faces Delay in Ethereum ETF Approval
The SEC decision to delay is further premised on the concerns and amendments under consideration relevant to the proposal. The regulator said that the modifications require longer terms for their assessment and ironing out any problems. The amended proposal is being subjected to comprehensive scrutiny to ensure its compliance with all regulatory requirements.
This problem is not specific to Grayscale. Other asset managers have also seen their similar applications delayed by the SEC. It is worth noting that Franklin Templeton’s application has been postponed until June 11. Other big entities, such as BlackRock, Fidelity, and VanEck, have been delayed, too.
SEC Stalls on Ethereum ETF Amid Concerns
After the latest action taken by the SEC, Grayscale has taken another step to improve its application. The company submitted Form S-3 in accordance with the U.S. Securities Act to further its activities within the context of the Ethereum ETF offering. These steps highlight Grayscale’s dedication to achieving approval.
The delay in the approval of spot Ethereum ETFs is evidence of continuing regulatory concern. Analysts say that adding stake features to some applications could lead to issues. SEC Chairman Gary Gensler has stressed that most crypto assets represent securities. This view may be affecting the SEC’s cautious approach to these ETFs.
However, the crypto ETF market has witnessed quite a lot of activity, even in the face of setbacks. Since the approval of its spot Bitcoin ETF, over $12 billion in cumulative net inflows have been reported. In contrast, Bitcoin Trust by Grayscale saw huge outflows, with a 50% erosion of the managed volume during the current week.
Read Also: SEC Opens Comment Period for Revised BlackRock Ethereum ETF
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