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The United States Securities and Exchange Commission has increased the deadline yet again to make a decision on the approval of digital asset management from Grayscale’s Ethereum Futures Trust Exchange-Traded Fund (ETF).
On March 22, a filing was published in which the SEC mentioned it would extend the March 31st deadline to May 30. The deadline is for the final decision on the approval of Grayscale’s Ethereum Futures Trust ETF. This ETF would focus on investing in Ethereum futures contracts.
“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 and the issues raised therein.”
Background of the Case
The SEC previously postponed the approval date for Grayscale’s futures ETF products to December 2023. The reason for the delay was to seek additional public input regarding whether the ETF should be listed or not.
This decision came three months after Grayscale proposed listing and trading shares of Grayscale Ethereum Futures Trust ETF in September 2023 on the New York Stock Exchange under Arca Rule 8.200-E.
After the proposal, James Seyffart, an analyst from Bloomberg ETF, claimed that Grayscale was using its futures ETF application as a “trojan horse” to influence the SEC’s decision to approve its spot ETF.
He stated that if the SEC approves Grayscale’s application, it would allow Grayscale to argue for the approval of its spot Ether ETF application.
There's the delay order for @Grayscale's Ethereum Futures ETF Filing — as expected. pic.twitter.com/gT3x8iw3Ml
— James Seyffart (@JSeyff) March 22, 2024
On January 25, the SEC delayed its decision on whether to approve Grayscale’s spot ETH ETF and also opened the application to public comments.
It followed the approval of spot Bitcoin ETFs on January 10. There has been an increase in skepticism among crypto industry commentators regarding whether the SEC will consider a harsh stance for crypto based ETFs.
Recent reports on the Ethereum ETF
John Lo, founder of Capital, has recently reported to reporters that he expects the SEC to put increased surveillance and scrutiny on all the upcoming crypto-based ETFs, especially those based on Ethereum.
He said, “Scrutiny towards cryptocurrency ETFs has only grown, as you could argue to a certain degree that the SEC was forced to approve the Bitcoin ETFs because of its case with Grayscale. No doubt, the SEC internally views that as a huge loss for themselves.”
Other asset management firms are also experiencing hurdles in the approval and launch of ETH ETFs.
On March 4, a separate filing was released stating that the SEC had announced that its decision on BlackRock’s application for its iShares Ethereum Trust and Fidelity for its Ethereum Fund would be delayed.
The delay in the approval of the Ethereum ETF is putting negative pressure on the price of Ethereum. As the prices of Ethereum fell 4.44% in a day and closed at $3365.4, the overall fluctuation in the day was approximately 9%, as per the data from Trading View.
Steefan George is a crypto and blockchain enthusiast, with a remarkable grasp on market and technology. Having a graduate degree in computer science and an MBA in BFSI, he is an excellent technology writer at The Coin Republic. He is passionate about getting a billion of the human population onto Web3. His principle is to write like “explaining to a 6-year old”, so that a layman can learn the potential of, and get benefitted from this revolutionary technology.
