SEC Extends Review Period for Grayscale’s Proposed Ethereum ETF

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The U.S. Securities and Exchange Commission (SEC) has once again extended its review period for Grayscale Investments’ application to launch the first Ethereum-based exchange-traded fund (ETF) in the US. In a filing published on March 22, the SEC announced it was pushing back the final decision date from March 31 to May 30.

According to SEC documents, the agency stated it needed more time “to consider the proposed rule change and the issues raised therein.” This is the second delay for the proposed Ethereum Futures ETF after the SEC first extended the review window in January from January 26 to March 31.

The proposed ETF from Grayscale would track the price of Ether futures contracts traded on the Chicago Mercantile Exchange. However, many crypto proponents had hoped approval could eventually pave the way for a spot ETF that directly invests in Ether.

James Seyffart, a senior ETF analyst at Bloomberg, tweeted that the delay was expected, labeling it a “trojan horse” to eventually get approval for a spot Ether ETF.

The SEC has been cautious about crypto ETF applications due to concerns around market manipulation and lack of sufficient regulation. The agency has rejected over a dozen spot bitcoin ETF applications but approved the bitcoin ETFs On January 10,2024.

Industry experts remain divided on the chances of a spot Ethereum ETF approval this year. According to Alex Thorn, head of market research at Galaxy Digital, ongoing probes into the Ethereum foundation and lack of engagement with applicants indicates approval is “very unlikely” by the new May deadline.

However, with growing institutional interest in Ether and maturation of the crypto markets, many remain hopeful regulators will become more accommodating over time. The extended review period allows the SEC to thoroughly weigh feedback as it continues shoring up regulatory frameworks around digital assets.

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