The U.S. Securities and Exchange Commission (SEC) has deferred its decision on the approval of Ethereum spot Exchange-traded funds (ETFs) proposed by Grayscale, a leading asset management firm.
In a notice dated December 5, the SEC declared its intention to extend the period for considering whether to greenlight or reject a proposed rule change that would enable NYSE Arca to trade shares of the Grayscale Ethereum Trust. This decision comes in the wake of a court directive urging the SEC to review Grayscale’s Bitcoin ETF launch in October.
Explaining the rationale behind the extension, the SEC stated, "The Commission believes it is appropriate to specify a longer period for taking action on the proposed rule changes to allow sufficient time to consider the proposed rule changes and the issues raised therein." Consequently, the SEC has designated January 25, 2024, as the deadline to either approve or reject the proposed rule change or to initiate further proceedings to assess the situation.
Notably, the SEC has not yet sanctioned the listing of spot Bitcoin (BTC) or Ethereum (ETH) exchange-traded funds on U.S. exchanges, despite authorizing investment products linked to cryptocurrency futures. Analyst James Seyffart from Bloomberg ETF speculated that if the committee opts to approve a spot BTC ETF, it might greenlight funds from multiple companies concurrently.
Grayscale initially submitted its application to the SEC in October, aiming to transform shares of the Grayscale Ethereum Trust into a spot ETH ETF, joining a cohort of companies awaiting regulatory approval. Presently, entities vying for spot crypto ETFs include industry giants like BlackRock, Hashdex, ARK 21Shares, Invesco Galaxy, VanEck, and Fidelity.
