US SEC to Deny Ether ETFs in May

US SEC is expected to reject spot Ether exchange-traded fund (ETF) applications in May, according to recent discussions with U.S. issuers.

According to a fresh source, as of May, the United States Securities and Exchange Commission (SEC) would most likely reject the application for spot exchange-traded funds (ETF), including ether.

Following their recent meetings with the regulator, U.S. issuers and other companies expect the SEC to reject spot Ether ETF applications next month, as reported by Reuters on April 24. The newspaper cited four individuals who were present during the discussions.

Recent meetings between issuers and the US SEC have been one-sided, and agency personnel have not discussed meaningful facts about the proposed products, according to the four individuals, who sought to remain anonymous owing to the confidential nature of the discussions.

They mentioned that the meetings had taken place recently. The sources compared the fruitless conversations over Ether ETFs with the comprehensive discussions between issuers and the agency in January, weeks before the agency approved spot Bitcoin ETFs.

Prior to the historic approval, the US SEC had been rejecting spot Bitcoin exchange-traded funds (ETFs) for more than a decade. It wasn’t until August 2023, when Grayscale Investments prevailed in court against the securities regulator, that it revised its position.

Analysts are in agreement that the US SEC is likely to further postpone the possibility of approving Ether exchange-traded funds (ETFs). “It seems more likely that approval will be delayed until later in 2024, or longer,” Todd Rosenbluth, a data analyst for the VettaFi ETF, is claimed to have remarked.

He also added that the regulatory situation is still too “cloudy.” According to Eric Balchunas, an analyst for Bloomberg ETFs, the chances of the Securities and Exchange Commission (SEC) approving a spot Ether ETF in May were approximately 35% in March.

In addition to this, he mentioned that he had obtained “good intel” that suggested the US SEC might be intentionally withholding information from potential fund issuers.

Balchunas also highlighted the potential impact of SEC Chair Gary Gensler’s position on Ether on the decision-making process. Gensler has declined to provide clarity on whether or not Ether is a public security.

Some global jurisdictions have been moving forward with plans to begin trading exchange-traded fund (ETF) products, while the United States appears to be on the verge of experiencing yet another delay.

The Securities and Futures Commission (SFC) of Hong Kong gave its official approval to the first batch of spot Bitcoin and Ethereum exchange-traded funds (ETFs) on April 24.

China Asset Management, Harvest Global Investments, and Bosera developed three BTC and three ETH ETFs in the initial batch of ETFs.The anticipated date for the beginning of trading for Hong Kong’s cryptocurrency exchange-traded funds (ETFs) is April 30.