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The U.S. Securities and Exchange Commission (SEC) has decided to further delay the proposal by Grayscale regarding an Ethereum ETF for immediate trading. The review deadline has been extended to June 23. This delay indicates a setback in the approval process for cryptocurrency-based ETFs in the U.S.
Grayscale submitted Form 19b-4 to NYSE Arca in October to convert its existing Ethereum Trust into an ETH ETF for immediate trading. In January, Grayscale successfully converted its Bitcoin Trust into a Bitcoin ETF for immediate trading.
The SEC’s decision to delay is based on concerns and amendments under review related to the proposal. The regulatory body stated that these amendments require thorough assessment and resolution of all issues. The proposed amendments are being carefully reviewed to ensure compliance with all regulatory requirements.
This situation is not unique to Grayscale but also affects other asset managers facing SEC delays. Notably, Franklin Templeton’s application has been postponed until June 11. Other major entities like BlackRock, Fidelity, and VanEck are also experiencing similar hurdles.
Following the latest move by the SEC, Grayscale has taken further steps to improve its application. The company has filed a Form S-3 under the U.S. Securities Act to continue its operations in the context of providing an Ethereum ETF. These steps highlight Grayscale’s efforts to secure approval.
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The delay in approving Ethereum ETFs indicates ongoing legal concerns. Analysts suggest that adding share features to some applications could create various issues. SEC Chairman Gary Gensler emphasized that most cryptocurrencies represent securities. This perspective may influence the SEC’s cautious approach to these ETFs.
However, the cryptocurrency ETF market continues to see activity despite challenges. Since the approval of the Bitcoin ETF for immediate trading, over $12 billion in net inflows have been reported. In contrast, Grayscale’s Bitcoin Trust has experienced significant outflows, with managed assets decreasing by 50% this week.
