Initially published for comment in the Federal Register on October 3, 2023, the SEC says it will extend the deadline to have “sufficient time to consider the proposed rule change.”
The United States Securities and Exchange Commission (SEC) has announced an extension, once again, of the deadline for the Ethereum Futures Trust exchange-traded fund (ETF) from the asset management company Grayscale.
According to a March 22 filing, the SEC revealed that it will lengthen the decision-making process for Grayscale’s Ethereum Futures ETF.
Final Deadline for Grayscale Ethereum Futures ETF
The SEC has now moved the deadline from March 31 to May 30 to decide whether or not to approve the investment product. A part of the SEC filing pointed out the following:
“The commission considers 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 and the issues raised therein. Accordingly, the commission, pursuant to section 19(b)(2) of the Act10 designates May 30, 2024 as the date on which the commission will approve or disapprove the proposed rule change.”
Bloomberg ETF analyst James Seyffart was not surprised by this deadline extension. “There is a delay order for the filing of the Grayscale Ethereum Futures ETF, as expected,” the analyst said in his post on X.
In November, Seyffart said he believes Grayscale’s application for an Ether Futures ETF is “nothing more than a Trojan horse” to gain approval for its spot ETH exchange-traded product. Therefore, it would be interesting to see how this latest delay influences the liquidation of the ETH spot ETF, especially considering the slim chances of approval.
The SEC delayed its decision on approving Grayscale’s Ethereum spot ETF in early January and at the same time opened the application to public comments. In the latest development, the asset management revised its Form 19b-4 in an attempt to force the regulator.
Approval of ETH Spot ETF Seems Very Unlikely, Says Alex Thorn
Alex Thorn, head of research at Galaxy Digital, has said that the approval of Ethereum spot ETFs seems very unlikely at this time. This reasoning is based on the SEC’s subpoena to crypto companies and lack of engagement with potential ETF issuers.
According to a recent report, the SEC sent subpoenas to several crypto companies regarding their relationships with the Ethereum Foundation. Thorn posits that the SEC could be investigating whether the original Ethereum ICO (Initial Coin Offering) was an unregistered securities offering rather than classifying secondary Ether trading today as securities trading.
The analyst mentioned that it is unclear how this research alone hurts the ETH ETF’s chances of approval. However, he believes that if this is combined with the fact that the SEC is not actively communicating with applicants, the authorization of ETFs in May seems very unlikely.
Skepticism in the Industry
Following the approval of Bitcoin spot ETFs on January 10, skepticism has grown among crypto industry commentators over whether the SEC will take a tougher stance on ETFs based on other cryptocurrencies.
A media outlet recently reported that John Lo, founder of Capital, expects the SEC to increase its scrutiny of all upcoming cryptocurrency-based ETFs, especially Ether ETFs. Other asset management firms are also facing hurdles with their Ethereum ETFs.
In separate filings on March 4 the SEC announced that its decision on applications by BlackRock for its iShares Ethereum Trust and Fidelity for its Ethereum Fund would be delayed.
By Audy Castaneda
