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News

SEC Is Likely to Reject Spot Ethereum ETFs On The Reason That ETH Is A Security

May 14, 2024 - Around 2 mins mins to read

Key Points:

  • SEC’s scrutiny of Ethereum’s security status in spot ETF order sparks concerns of potential rejection.
  • Spot Ethereum ETF approval remains uncertain amidst delays in SEC engagement and Grayscale’s withdrawal.
  • Analysts Seyffart and Balchunas revised the probability of spot Ether ETF approval to 25%, down from 70% in January.
Financial lawyer Scott Johnsson highlighted on social media that official documents suggest the SEC is evaluating Ethereum’s security status in the spot Ethereum ETF order, a detail absent from the Bitcoin spot/futures ETF application.
SEC Is Likely to Reject Spot Ethereum ETFs On The Reason That ETH Is A Security
SEC Is Likely to Reject Spot Ethereum ETFs On The Reason That ETH Is A Security 2

Read more: What Is A Spot Ethereum ETF? How Important Is The New Ether ETF?

SEC Evaluation Sparks Doubts on Spot Ethereum ETF Approval

Bloomberg analyst James Seyffart weighed in, indicating an increased possibility of the SEC rejecting the Ethereum ETF on the grounds of its security classification. However, Seyffart also expressed personal belief that the SEC might not categorize Ethereum as a security in upcoming decisions.

Under Gary Gensler’s SEC, known for its cautious approach to cryptocurrency, attention has shifted to Ethereum, with pending applications for a spot Ethereum ETF. Delays in SEC engagement and Grayscale’s withdrawal have spurred doubts within the community regarding imminent approval.

In a recent filing, 21Shares omitted a clause permitting asset staking via third-party providers, possibly in response to SEC feedback, noted Bloomberg ETF analyst Eric Balchunas.

Read more: Ethereum ETF Applications: Is There Potential For New Breakthrough?

Analysts Adjust Approval Odds Ahead of Key Decision Deadlines

Seyffart and Balchunas, previously optimistic about spot Ethereum ETF approvals, now estimate a 25% chance for approval by May 23, down from 70% in January.

Critical decisions loom, with the SEC’s ruling on VanEck’s application due May 23, and deadlines for ARK 21Shares and Hashdex on May 24 and May 30, respectively. The outcome will significantly impact the trajectory of Ethereum within the regulated investment landscape.

DISCLAIMER: The information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your own research before investing.

ETH

Ethereum

Gary Gensler

SEC

Spot Ethereum ETF

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Author

Harold

With a passion for untangling the complexities of the financial world, I've spent over four years in financial journalism, covering everything from traditional equities to the cutting edge of venture capital. "The financial markets are a fascinating puzzle," I often say, "and I love helping people make sense of them." That's what drives me to bring clear and insightful financial journalism to the readers of Coincu.
News

SEC Is Likely to Reject Spot Ethereum ETFs On The Reason That ETH Is A Security

Key Points:

  • SEC’s scrutiny of Ethereum’s security status in spot ETF order sparks concerns of potential rejection.
  • Spot Ethereum ETF approval remains uncertain amidst delays in SEC engagement and Grayscale’s withdrawal.
  • Analysts Seyffart and Balchunas revised the probability of spot Ether ETF approval to 25%, down from 70% in January.
Financial lawyer Scott Johnsson highlighted on social media that official documents suggest the SEC is evaluating Ethereum’s security status in the spot Ethereum ETF order, a detail absent from the Bitcoin spot/futures ETF application.
SEC Is Likely to Reject Spot Ethereum ETFs On The Reason That ETH Is A Security
SEC Is Likely to Reject Spot Ethereum ETFs On The Reason That ETH Is A Security 4

Read more: What Is A Spot Ethereum ETF? How Important Is The New Ether ETF?

SEC Evaluation Sparks Doubts on Spot Ethereum ETF Approval

Bloomberg analyst James Seyffart weighed in, indicating an increased possibility of the SEC rejecting the Ethereum ETF on the grounds of its security classification. However, Seyffart also expressed personal belief that the SEC might not categorize Ethereum as a security in upcoming decisions.

Under Gary Gensler’s SEC, known for its cautious approach to cryptocurrency, attention has shifted to Ethereum, with pending applications for a spot Ethereum ETF. Delays in SEC engagement and Grayscale’s withdrawal have spurred doubts within the community regarding imminent approval.

In a recent filing, 21Shares omitted a clause permitting asset staking via third-party providers, possibly in response to SEC feedback, noted Bloomberg ETF analyst Eric Balchunas.

Read more: Ethereum ETF Applications: Is There Potential For New Breakthrough?

Analysts Adjust Approval Odds Ahead of Key Decision Deadlines

Seyffart and Balchunas, previously optimistic about spot Ethereum ETF approvals, now estimate a 25% chance for approval by May 23, down from 70% in January.

Critical decisions loom, with the SEC’s ruling on VanEck’s application due May 23, and deadlines for ARK 21Shares and Hashdex on May 24 and May 30, respectively. The outcome will significantly impact the trajectory of Ethereum within the regulated investment landscape.

DISCLAIMER: The information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your own research before investing.