SEC Inches Closer to Approving Spot Ethereum ETFs

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Bloomberg ETF analyst Eric Balchunas predicts July 18 launch as asset managers file amended registration statements, signaling potential green light for Ethereum-based exchange-traded funds.

The cryptocurrency investment landscape is on the brink of a significant milestone as the Securities and Exchange Commission (SEC) appears to be moving closer to approving spot Ethereum Exchange-Traded Funds (ETFs). Bloomberg ETF analyst Eric Balchunas has pinpointed July 18 as the “best guess” for the launch date, following a series of amended filings by major asset managers.

Because the SEC asked for the S-1s on July 8th but told issuers the fee wasn’t nec yet. They will give guidance back to issuers soon along with the game plan. Then the docs come will come back with fees (and every other blank) filled it and then it’s Go time. https://t.co/S4u8HaMckh

— Eric Balchunas (@EricBalchunas) July 8, 2024

The SEC’s recent request for S-1 amendments has prompted companies to revise their registration statements and resubmit applications. This development has sparked optimism within the crypto community, as it suggests the regulatory body is inching towards a decision on Ethereum-based ETFs.

Balchunas noted that the latest round of amendments contained minimal changes, describing two of the earliest filings as having “nothing to see here.” This observation implies that the asset managers are fine-tuning their proposals to meet the SEC’s requirements without substantial alterations to their original plans.

The filing process involves both S-1 and S-3 amendments, which pertain to the asset managers’ ability to issue ETFs. These are distinct from the 19b-4 filings that allow exchanges to list and trade the funds upon launch.

VanEck led the charge on Monday by submitting an updated registration statement for its spot Ethereum ETF, now renamed The VanEck Ethereum Trust. 21Shares swiftly followed suit with its own registration for spot Ethereum ETFs. Grayscale, a major player in the crypto investment space, filed amendments for its $28 billion Grayscale Ethereum Trust and a more cost-effective “mini” version.

Other industry giants, including Franklin Templeton, Fidelity, and BlackRock, also submitted amended registration statements for their respective spot Ethereum ETFs. Notably, none of the filings on Monday disclosed the planned fees for the ETFs, with Balchunas suggesting that the SEC has yet to mandate this information.

The amendments brought some minor changes across the board. VanEck’s filing saw the removal of specific regulatory language regarding custody, particularly concerning Ethereum withdrawals. Other changes aligned with those made by Bitwise the previous week, reflecting the SEC’s stance on compliance within the crypto market.

Grayscale’s updated filing for its “mini” Ethereum ETF introduced a new section clarifying that none of the Ethereum in the product will be staked. This addition addresses concerns about the practice of delegating Ethereum tokens to the network in exchange for rewards.

As the crypto industry awaits the SEC’s decision, the potential approval of spot Ethereum ETFs represents a significant step towards mainstream adoption of cryptocurrency investments. The launch of these ETFs could provide investors with a regulated and accessible means of gaining exposure to Ethereum’s price movements without directly owning the cryptocurrency.

With July 18 marked as a potential landmark date, all eyes are on the SEC as it navigates the complex terrain of cryptocurrency regulation and investment products.