May likely see denial of spot Ether ETFs by US SEC

According to a recent report, it is highly likely that the United States Securities and Exchange Commission (SEC) will reject applications for spot Ether (ETH) exchange-traded funds (ETF) in May. Sources revealed that issuers and other firms in the US expect the SEC to deny these applications after recent meetings with the regulator. However, the discussions have been one-sided, with agency staff not providing any substantial details about the proposed products. This is in stark contrast to the detailed discussions that took place between issuers and the agency in January, before spot Bitcoin ETFs were approved. The SEC had previously rejected spot BTC ETF filings for over 10 years until Grayscale Investments won a court case against the regulator in August 2023, leading to a change in the SEC’s stance. Many analysts believe that the SEC will further delay the approval of Ether ETFs, possibly until later in 2024 or beyond, as the regulatory landscape is still uncertain. Bloomberg ETF analyst Eric Balchunas had estimated a 35% chance of the SEC approving a spot Ether ETF in May, but there are indications that the SEC may intentionally be ignoring prospective fund issuers. The stance of SEC Chair Gary Gensler on Ether could also influence the decision process, as he has not clarified whether Ether is considered a security. While the US faces another delay, some global jurisdictions are moving forward with plans to trade ETF products. Hong Kong’s Securities and Futures Commission (SFC) has officially approved the first batch of spot Bitcoin and Ether ETFs, with trading set to begin on April 30.