SEC Delays Decision On Ethereum ETFs, Invites Public Insight

The United States Securities and Exchange Commission (SEC) has postponed its decisions on several proposed Ethereum-focused exchange-traded funds (ETFs). 

The SEC said on Monday it was “instituting proceedings” for the Grayscale Ethereum Futures Trust and the Hashdex Nasdaq Ethereum ETF. The regulator has called for comments regarding these ETFs to gauge public sentiment and acquire additional information. This solicitation of public input is essential to the SEC’s evaluation process.

Later on Monday, the SEC also pushed back its decision on the ARK 21Shares Ethereum ETF and the VanEck Ethereum ETF  — and asked for public input. Stakeholders and interested parties have about 21 days to provide input on the ARK 21Shares, Grayscale, VanEck, and Hashdex Ethereum ETFs.

Bloomberg ETF analyst James Seyffart said he “expected” these delays to happen before December 25. He believes that the regulator will make the final decision on the ETFs in late May. Seyffart said the SEC began a comment period to decide whether to treat Ethereum ETFs differently from spot Bitcoin ETFs.

UPDATE: SEC Going early with delay orders for @hashdex & @Grayscale #Ethereum ETF filings. Neither were due until Jan 1, 2024.

Maybe just clearing the queue before the holidays? pic.twitter.com/LdZQxGh43L

— James Seyffart (@JSeyff) December 18, 2023

The statement read:

“The Commission asks that commenters address the sufficiency of the Exchange’s statements in support of the proposal, which are set forth in the Notice, in addition to any other comments they may wish to submit about the proposed rule change.”

The SEC approved ETH futures ETFs in the past but hasn’t approved a spot ether or mixed fund yet. Nine futures-based products were approved simultaneously in October, marking their debut. The crypto industry eagerly awaits the SEC’s decision on spot Bitcoin ETFs. Over the past month, executives from various companies have met with the agency’s staff to go over details.

ETF Approval Delays Continue

The regulatory authority previously delayed a decision on the Hashdex Nasdaq Ethereum ETF last month. The ETF seeks to hold both futures contracts and spot ether and is managed by Toroso Investments, which is registered as a commodity pool operator with the Commodity Futures Trading Commission (CFTC).

Similarly, the regulator suspended the decision on Grayscale’s Ethereum futures ETF last month due to concerns about Ethereum’s proof of stake (PoS) model and associated risks of manipulation and fraud.