SEC Delays Grayscale Ether Futures ETF Approval

SEC has extended the deadline for approving Grayscale’s Ethereum Futures Trust ETF until May 30, seeking more public input.

Grayscale, a digital asset management company, has once again extended the deadline for the United States Securities and Exchange Commission to approve the Ethereum Futures Trust exchange-traded fund (ETF).

In a public filing on March 22, the Securities and Exchange Commission announced that it will postpone the deadline for deciding whether or not to approve Grayscale’s Ethereum Futures Trust ETF, which will focus on investing in Ethereum futures contracts, from March 31 to May 30.

“The Commission finds that it is appropriate to designate a longer period within which to issue an order approving or disapproving the proposed rule change so that it has sufficient time to consider the proposed rule change and the issues raised therein.”

The approval date for Grayscale’s futures exchange-traded fund (ETF) product was delayed after announcing in December 2023 that it would seek additional public input on listing the ETF.

This occurred barely three months after Grayscale proposed listing and trading shares of the Grayscale Ethereum Futures Trust ETF in September 2023, following Arca Rule 8.200-E of the New York Stock Exchange.

In the aftermath of the listing, Bloomberg ETF analyst James Seyffart asserted that Grayscale was employing its futures ETF application as a “trojan horse” to pressure the Securities and Exchange Commission into accepting its spot ETF.

He explained that if the Security Exchqnge Commission granted Grayscale’s application, it would allow Grayscale to argue for the approval of their application for a spot Ether exchange-traded fund.

In the meantime, on January 25, the Securities and Exchange Commission postponed its decision over whether or not to accept a spot Ether exchange-traded fund (ETF) from Grayscale.

Additionally, they opened the application to public comments. As a result of the acceptance of spot Bitcoin exchange-traded funds (ETFs) on January 10, there has been a rise in the level of suspicion among critics in the cryptocurrency industry, questioning whether or not the Security Exchange Commission will take a more stringent position on crypto-based ETFs.

John Lo, the founder of Capital, said that he expects the Securities and Exchange Commission to increase the level of scrutiny for all incoming cryptocurrency-based exchange-traded funds (ETFs), especially Ether ETFs:

“Scrutiny towards cryptocurrency ETFs has only grown, as you could argue to a certain degree that the SEC was forced to approve the Bitcoin ETFs because of its case with Grayscale. No doubt, the SEC internally views that as a huge loss for themselves.”

Other asset management companies face challenges with Ethereum exchange-traded funds (ETFs).

In two separate filings on March 4, the Securities and Exchange Commission indicated that it would be delaying its judgment regarding applications submitted by BlackRock for its iShares Ethereum Trust and Fidelity for its Ethereum Fund.