The Securities and Exchange Commission (SEC) of the United States is seeking feedback from the public regarding proposed rule changes that would permit the listing and trading of shares of three spot Ether (ETH) exchange-traded funds (ETFs) on exchanges.
On April 2, the SEC released separate notices stating that the public has 21 days to respond after the publication in the Federal Register to the proposals for spot ETH ETFs from asset managers Bitwise, Fidelity, and Grayscale. Bitwise and Grayscale have proposed their ETF filings for listing and trading on NYSE Arca, while Fidelity has submitted its filing to the Cboe BZX Exchange. The commission is expected to make a final decision on the investment vehicle in May.
According to James Seyffart, an ETF analyst at Bloomberg, the filings do not indicate any significant changes. He expressed concern about the SEC’s silence on the matter. Seyffart added on April 3:
“Silence from the SEC isn’t a positive sign in this case.”
In January, the SEC approved several spot Bitcoin (BTC) ETFs for the first time, following scrutiny from investors and media outlets. The decision was made with the deciding vote of Chair Gary Gensler. However, many analysts believe that the chances of the commission making a similar decision regarding Ether ETFs have been steadily decreasing in 2024.
The first Ether ETF application that the SEC will likely address is the one from VanEck, with a final deadline set for May 23. Other asset managers, including Hashdex and ARK 21Shares, also have similar filings in progress.
The SEC’s decision to approve or deny a spot ETH ETF could be influenced by an ongoing investigation into the Ethereum Foundation. The commission may classify Ether as a security, which could pose challenges for the approval process. However, blockchain firm Consensys submitted a comment letter to the SEC in March, arguing that the regulator’s concerns about potential fraud and market manipulation in relation to a spot ETH ETF were unfounded.
In other news, Ether ETFs are facing opposition in the Senate, Wright is not Satoshi, and Dencun goes live, as reported in Hodler’s Digest from March 10-16.