SEC Delays Decision on Grayscale’s Ethereum Futures ETF

The U.S. Securities and Exchange Commission (SEC) has postponed the deadline for reviewing Grayscale Investments’ Ethereum Futures Trust ETF application to May 30, 2024.

“The Commission finds it appropriate to set a longer period within which to issue an order approving or disapproving the proposal so that it has sufficient time to consider the proposal,” the document states.

Bloomberg analyst James Seyffart described the SEC’s decision as “expected.”

There’s the delay order for @Grayscale‘s Ethereum Futures ETF Filing — as expected. pic.twitter.com/gT3x8iw3Ml

— James Seyffart (@JSeyff) March 22, 2024

In September 2023, Grayscale Investments submitted an application to the SEC to launch an exchange-traded fund based on Ethereum futures traded on the CME.

On January 10, 2024, the SEC approved all 11 applications for spot Bitcoin ETFs. Following this, issuing companies showed interest in launching funds based on the second-largest cryptocurrency by market capitalization.

In early March, Grayscale and Coinbase discussed with the SEC the conversion of ETHE into a spot Ethereum ETF. The race to launch this instrument also includes Franklin Templeton, VanEck, BlackRock, Fidelity, and Invesco with Galaxy.

According to The Block, Galaxy Digital’s head of research, Alex Thorn, called the approval of an ETH ETF in May “extremely unlikely.” He attributed this to the lack of active engagement by the Commission with issuers and media reports about SEC subpoenas regarding Ethereum’s classification.

Earlier, Bloomberg analyst Eric Balchunas halved the probability of a spot Ethereum ETF being approved in May from 70% to 35%.

Previously, U.S. senators urged the SEC not to approve new cryptocurrency exchange-traded funds, citing the “enormous risks” associated with these instruments.