SEC Postpones Decision on Spot Ethereum ETF Proposals from Grayscale, BlackRock, and Franklin Templeton

On April 23, the US Securities and Exchange Commission (SEC) postponed its decisions on the Grayscale and BlackRock applications for spot Ethereum (ETH) exchange-traded funds (ETFs). The SEC issued notices of the delay in the Grayscale decision and the amending of the BlackRock application just hours after postponing its decision on Franklin Templeton’s proposed spot Ether ETF.

The agency pushed its timeline for a decision on the Franklin ETH ETF to June 11, 2024, after which the SEC could disapprove or approve or initiate proceedings, the regulator said in a filing on Tuesday. The SEC’s decision on converting Grayscale’s Ether Trust to a spot ETH exchange-traded product on NYSE Arca was originally due on April 24. However, this deadline has now been extended by 60 days to June 23.

The agency wrote:

“The Commission finds that it is appropriate to designate a longer period within which to issue an order approving or disapproving the proposed rule change so that it has sufficient time to consider the proposed rule change, as modified by Amendment No. 1.”

Recent Developments in Ethereum ETF Applications

In collaboration with NYSE Arca, Grayscale filed a Form 19b-4 in October last year to convert the Grayscale ETH trust to a spot Ether ETF. The SEC had previously issued the notice of Grayscale’s amendment filing on April 2. Moreover, Grayscale filed an S-3 form on April 23 in accordance with the US Securities Act to further its activities within the context of the Ethereum ETF offering.

On the other hand, BlackRock submitted an S-1 application for a spot Ethereum ETF in November. In March, the agency postponed the decision on the BlackRock application. Later that month, the SEC postponed decisions on Hashdex and ARK 21 spot ETH ETF applications by two months. On April 19, BlackRock filed an amendment to the application. The SEC’s notice on April 23 outlines the modifications in the amendment, which mainly concern the creation and redemption of shares. It further extends the comment period on the proposal for 21 days after publication in the Federal Register without specifying a new deadline for an SEC decision.

Franklin Templeton submitted its S-1 registration statement for the Ether ETF in February. The proposed ETF seeks to track the price of ETH and would utilize the Bank of New York Mellon and Coinbase Custody Trust Company as custodians, the firm said. The ongoing delay in approving spot Ether ETFs is evidence of continuing regulatory concern.