Home Crypto News USA May Deny Ethereum ETFs

USA May Deny Ethereum ETFs

25 Apr, 2024 Crypto News

USA May Deny Ethereum ETFs

A new report suggests that the United States Securities and Exchange Commission (SEC) is expected to reject applications for spot Ether exchange-traded funds (ETFs) in May.

On April 24, Reuters reported that after recent discussions with the regulator, U.S. issuers and other firms anticipate the SEC will turn down the spot Ether ETF applications next month.

This information comes from four individuals involved in the meetings who chose to remain anonymous due to the confidential nature of their discussions.

These sources noted that the recent meetings with the SEC were predominantly one-sided, with the agency's staff avoiding any substantial discussions about the proposed products.

The situation with the Ether ETFs was contrasted by the sources with earlier, more detailed discussions that occurred in January before the SEC approved spot Bitcoin ETFs.

Before its groundbreaking decision on Bitcoin, the SEC had consistently rejected spot BTC ETF filings for more than a decade, only reversing its stance following a court victory by Grayscale Investments against the SEC in August 2023.

Many analysts believe that the SEC will likely postpone the approval of Ether ETFs even further.

“It seems more likely that approval will be delayed until later in 2024, or longer,” stated Todd Rosenbluth, an ETF data analyst at VettaFi, mentioning that the regulatory environment remains too “cloudy.”

In March, Bloomberg ETF analyst Eric Balchunas assessed the likelihood of the SEC approving a spot Ether ETF in May at about 35%.

He also indicated having “good intel” suggesting that the SEC might be deliberately withholding feedback from prospective fund issuers.

Balchunas also pointed out that the position of SEC Chair Gary Gensler on Ether could influence the decision-making process, as Gensler has not clarified whether Ether is considered a security.

While the U.S. appears poised for another postponement, some international markets are advancing with their ETF initiatives.

On the same day, the Securities and Futures Commission (SFC) of Hong Kong officially sanctioned the first batch of spot Bitcoin and Ether ETFs, which includes three BTC and three ETH ETFs managed by China Asset Management, Harvest Global Investments, and Bosera.

Following this approval, the newly sanctioned crypto ETFs in Hong Kong are set to begin trading on April 30.

Sources:

https://cointelegraph.com/news/us-sec-deny-spot-ether-etfs-next-month

https://www.reuters.com/markets/us/us-sec-expected-deny-spot-ether-etfs-next-month-industry-sources-say-2024-04-25/

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