The U.S. Securities and Exchange Commission (SEC) has announced a delay in its decision-making process regarding Exchange Traded Funds (ETFs) for spot Ethereum filed by BlackRock and Grayscale. This decision came shortly after the SEC deferred its ruling on Franklin Templeton's proposed spot ETH ETF. Grayscale's deadline for converting its ETH Trust into a spot ETH exchange-traded product on NYSE Arca, originally set for April 24, has now been extended by 60 days to June 23. The SEC stated its intention to utilize this extended timeframe to thoroughly evaluate the proposed rule change, taking into account recent amendments submitted by Grayscale.
In its notice issued on April 23, the SEC emphasized the need for an extended period to consider Grayscale's proposal, as modified by Amendment No. 1, ensuring sufficient time for a comprehensive review. Although Grayscale submitted amendments on April 2, these changes were perceived to strengthen their argument without materially altering the proposal. Meanwhile, the SEC is expected to reach a decision on Franklin Templeton's application by June 11, adding to the ongoing developments in the ETF approval process for spot ETH.
On the same day, Grayscale submitted Form S-3 for the Grayscale ETH Trust and Form S-1 for the Grayscale ETH Mini Trust. Additionally, BlackRock filed an S-1 for a spot ETH ETF in November, with its decision postponed in March. Following an amendment to the application on April 19, the SEC released a notice outlining the changes, primarily focusing on the creation and redemption of shares, while also extending the comment period. Despite these amendments, the SEC has not provided a new decision deadline, leaving the ETF approval process in a state of anticipation.
Observers noted the SEC's lack of involvement in the ETH ETF spot application, fueling speculations of potential rejection. However, Grayscale previously achieved a legal victory against the SEC in August, when an appeals court partially overturned the SEC's rejection of its application to convert the Grayscale Bitcoin Trust into a listed Bitcoin ETF, indicating a complex regulatory landscape surrounding digital asset ETFs.
