SEC Delays Grayscale Ethereum Spot ETF Again
According to official documents, the U.S. Securities and Exchange Commission (SEC) has once again delayed the approval of the Grayscale Ethereum Spot ETF on January 25, following a previous delay on December 5 last year. The SEC also announced the opening of a public comment period.
During the public comment period, the SEC raised the following concerns:
– Is Ethereum Proof of Stake susceptible to manipulation or influence by a few entities?
– What are the views on the liquidity, transparency, and sensitivity to manipulation of ETH?
– What are the views on the correlation between the ETH spot market and the CME ETH futures market?
– Do bad actors need to manipulate the CME ETH futures to impact volatility, given that the CME ETH futures are regulated?
– Do the aforementioned characteristics raise concerns among the public regarding the susceptibility of ETH to fraud and manipulation?
The SEC stated that comments must be submitted within 21 days, and the rebuttal period will last for 35 days. Previously, the SEC also delayed the approval of the BlackRock Ethereum ETF.
Analyst: 60% Chance of Approval
Regarding the likelihood of the approval of the Ethereum Spot ETF, James Seyffart, ETF analyst at Bloomberg, stated to Blockworks:
“I basically think there is about a 60% chance that the SEC approves all Ethereum spot ETFs, but they have many ways to delay. So if the SEC wants to be prepared and wants all issuers to go at the same time, it’s most likely going to be on May 23, unless the SEC can find some way to reject or delay the whole process.”
On the other hand, if it does not pass on May 23, James Seyffart believes that it will have to wait until 2025. In November last year, James Seyffart predicted a 90% chance of approval for Bitcoin spot ETFs.
Grayscale Lawsuit Impacting SEC’s Decision?
In addition to BlackRock and Grayscale, Ark 21Shares and VanEck are also vying for an Ethereum ETF. May 23 is the 240-day window period for the SEC to approve or reject the proposals from Ark/21Shares and VanEck.
Scott Johnsson, a partner at venture capital firm Van Buren Capital, pointed out that the outcome of the Grayscale lawsuit will still play a role in the approval of the Ethereum ETF:
“You can say that this ruling opens the door for BTC, and it also puts the SEC in a logical dilemma.”
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