SEC Delays Decision On Grayscale’s Spot Ether ETF

SEC Delays Decision On Grayscale’s Spot Ether ETF

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The United States Securities and Exchange Commission (SEC) has delayed its decision on approving or rejecting Grayscale’s spot Ether ETF application, pushing its decision to 2024. 

The delay means the SEC has until the 25th of January to decide on Grayscale’s spot Ether application or extend the deadline. 

SEC Pushes Decision

In a notice published on the 5th of December, the Securities and Exchange Commission stated it was designating a longer period on deciding whether it should approve or disapprove a proposed rule change that would allow the NYSE Arca to list and trade shares of the Grayscale Ethereum Trust. The announcement by the Securities and Exchange Commission comes after an appellate court ordered the commission to review Grayscale’s Bitcoin ETF offering back in October. The SEC, in its filing, stated, 

“The Commission finds it appropriate to designate a longer period within which to take action on the proposed rule change so that it has sufficient time to consider the proposed rule change and the issues raised therein. Accordingly, the Commission [...] designates the 25th of January, 2024, as the date by which the Commission shall either approve or disapprove or institute proceedings to determine whether to disapprove the proposed rule change.”

In a post on X, Bloomberg ETF analyst James Seyffart stated that the SEC’s decision was along expected lines and not surprising at all. 

“Update: As expected, @Grayscale’s Ethereum trust filing just got delayed. It was due by 12/6/23, so this is completely normal.”

More Delays 

The Securities and Exchange Commission had recently delayed a decision on the proposed Hashdex Nasdaq Ethereum ETF as well. The ETF plans to hold spot Ether and futures contracts. Several other major institutions are also looking to launch a spot Ether ETF of their own, should they get regulatory approval. These include giant institutions such as BlackRock as well. 

Back in October, Grayscale had filed a Form 19b-4 to convert its Grayscale Ethereum Trust into a spot Ether ETF. Grayscale’s Ethereum Trust was launched in 2019 and is currently the largest ETH investment vehicle in the world, with nearly $5 billion worth of assets under management. This figure represents nearly 2.5% of all ETH currently in circulation. The trust voluntarily became an SEC reporting company in October 2020. 

SEC Yet To Approve Spot BTC Or ETH ETF 

Grayscale and others such as BlackRock are also patiently waiting for the SEC’s approval for what would become the first spot Bitcoin ETF in the United States of America. So far, the regulator has not given the green light for a spot BTC or ETH exchange-traded fund for listing on a US exchange. However, it has approved investment vehicles tied to crypto futures. James Seyffart has speculated that if the SEC approves a spot Bitcoin or Ethereum ETG, it could move forward with simultaneous approvals of applications from multiple entities. 

Currently, the SEC has applications from several firms for approval of spot ETFs. This includes applications from Hashdex, BlackRock, ARK 21Shares, VanEck, Fidelity, and Invesco Galaxy.

Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

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