SEC Delays Decision On Hashdex, Ark 21Shares Ethereum ETFs

Table of Contents

• SEC Delays Decision 
• Analysts Not Hopeful 

The United States Securities and Exchange Commission has delayed its decision on spot Ethereum applications filed by Hashdex and Ark 21Shares. 

In its notice filed on Tuesday, the Securities and Exchange Commission stated it was extending its time to decide on both applications to May. 

SEC Delays Decision 

According to a recent filing, the Securities and Exchange Commission has decided to take additional time to take into consideration the potential impact and regulatory concerns associated with the proposed spot Ethereum ETFs. The SEC, in its filing, stated, 

“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.”

Following the delay, the SEC must approve or disapprove the spot Ethereum applications by the 30th of May, 2024. The Nasdaq exchange had filed with the Securities and Exchange Commission to list the Hashdex Nasdaq Ethereum ETF in September. The fund is registered as a commodity pool operator with the Commodity Futures Trading Commission and is also a member of the National Futures Association. The SEC has already delayed making a decision on Hashdex’s spot Ethereum ETF application and had asked for public comments in December. The SEC has also delayed its decision regarding the Ark 21Shares Ethereum ETF and has asked for public comments on the application. 

Analysts Not Hopeful 

Meanwhile, Bloomberg ETF analysts James Seyffart and Eric Balchunas have predicted the outcome of the pending approvals. Both analysts have predicted another denial by the Securities and Exchange Commission in May. Balchunas, in his analysis of the delay, slashed the chances of a spot Ethereum ETF approval by May to 35%, stating, 

“Our odds of eth ETF approval by the May deadline are down to 35%. I get all the reasons they SHOULD approve it (and we personally believe they should), but all the signs/sources that were making us bullish 2.5mo out for BTC spot are not there this time. Note: 35% isn’t 0%, still poss, and long-term we think it will happen.”

Seyffart agreed with the analysis, adding that the Securities and Exchange Commission’s lack of interactions with spot Ethereum ETF applicants is the exact opposite of the commission’s conduct during talks regarding spot Bitcoin ETFs, which were eventually approved. 

“My cautiously optimistic attitude for ETH ETFs has changed from recent months. We now believe these will ultimately be denied the 23rd of May for this round. The SEC hasn’t engaged with issuers on Ethereum specifics. Exact opposite of #Bitcoin ETFs this fall.”

Seyffart also added that the SEC would delay its decision on other applications as well, adding, 

“We are likely to see at least 3 more Ethereum ETF delays today or tomorrow. VanEck, Ark/21Shares, Hashdex, and Grayscale are all due for delays in the next ~12 days.”

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.