Grayscale Notes Ether ETF Approvals Amid SEC Inactivity

Grayscale Notes Ether ETF Approvals Amid SEC Inactivity

Grayscale Notes Ether ETF Approvals Amid SEC Inactivity

Grayscale is confident in the approval of ETFs investing in spot Ether (ETH) despite concerns about the SEC’s lack of engagement.

Despite recent “chatter” about the United States Securities and Exchange Commission’s “lack of engagement” with applicants, Grayscale is confident that exchange-traded funds that invest in spot Ether (ETH) will receive approval in May.”

I do not believe that the perceived lack of interaction from regulators should indicate any particular outcome. Grayscale Chief Legal Officer Craig Salm expressed his confidence in the approval of exchange-traded funds (ETFs) in a March 25 X post.

Grayscale Notes Ether ETF Approvals Amid SEC Inactivity
Source: Craig Salm

Grayscale Chief Legal Officer Craig Salm noted that in the months leading up to the approval of spot Bitcoin exchange-traded funds (ETFs), many of the typical concerns of spot Ether ETFs were “figured out.” These issues included the formation and redemption procedures, cash and in-kind models, asset protection, loss prevention and custody.

When asked about it, he stated, “So in many ways, the SEC already has engaged, and issuers simply have less to engage on this time.” He said that ETF issuers who wanted to incorporate staking into their spot ETFs would have an additional issue to “hash out” with the regulator.

“The case is just as strong as it was for spot #Bitcoin ETFs.”

The following companies have submitted applications: Ark 21Shares, Fidelity and Franklin Templeton. Recently, Bloomberg ETF analysts Eric Balchunas and James Seyffart expressed their concern with a “lack of engagement” from the SEC.

As a result, they have cut their odds for an approved spot for Ether in May to 25%. Balchunas stated in a post on X on March 25 that it was a “pessimistic 25%” and added that the lack of involvement appears to be “purposeful” rather than “procrastination.”

Salm said that the recent licensing of Ether Futures ETFs and the regulation of those products as commodity futures put the spot Ether ETFs in a strong position for approval due to the “high correlation” between futures and spot products.

This is because futures and spot products have a “high correlation.” Last week, the chief legal officer of Coinbase, Paul Grewal and Brian Quintenz, a former commissioner of the Commodity Futures Trading Commission, came to a conclusion that was quite similar to this one.

Hashdex, BlackRock, VanEck, ARK 21Shares, Fidelity, Invesco Galaxy, Grayscale, Franklin Templeton and VanEck are some of the spot Ether ETF applications that are competing for clearance from the US Securities and Exchange Commission.

The Securities and Exchange Commission must decide on VanEck’s application by the 23rd of May, and analysts predict that all applicants will learn their fate on that date.

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