- One-sided view in SEC meeting
- Some additional news
One-sided view in SEC meeting
VanEck, ARK Investment Management and seven other issuers have filed with the SEC to list Ethereum Spot ETFs that track the spot price of the world's second-largest cryptocurrency after Bitcoin. The SEC must decide on VanEck and ARK's filings by May 23 and May 24, respectively.
Four participants in recent meetings between issuers and the SEC are taking a one-sided view, and staff at the agency have not discussed the proposed products in detail. That contrasts with the intensive discussions between issuers and the SEC in the weeks leading up to the landmark approval of Bitcoin ETF Spot funds in January.
Gary Gensler had previously rejected Spot Bitcoin ETFs for more than a decade over market manipulation concerns but was forced to approve them after Grayscale Investments won a court case . The other four said issuers had argued in meetings that the Ethereum-pegged ETFs and ETF Futures that the SEC approved in October set a precedent for Ethereum ETF Spot products and had tried to address potential legal concerns.
They added that SEC staff listened but did not raise specific concerns or only asked general questions, suggesting a high likelihood the SEC would reject the filings. That would be a setback for the cryptocurrency industry , which had hoped Bitcoin ETF Spot funds would pave the way for other similar products and bring cryptocurrencies into the mainstream.
“Approval will be delayed until late 2024 or longer,” said Todd Rosenbluth, ETF analyst at data firm VettaFi. The regulatory picture still looks murky."
Some issuers said they still plan to submit more detailed documents to the SEC to continue negotiations. An SEC spokesperson said it does not comment on private filings.
VanEck CEO Jan van Eck told CNBC this month that the company's application "will probably be denied."
The disagreement will be reflected in the price of ether, said Hong Fang, president of cryptocurrency exchange OKX. Although ETH is up 39% this year, it is still struggling to keep up with Bitcoin, which has surged more than 51% and hit a new peak last month.
Some additional news
According to sources and SEC documents, to date, the SEC has only held a few meetings on Ethereum-related products. The only meeting announced by the regulator was last month with cryptocurrency exchange Coinbase regarding Grayscale's application to convert Ethereum Trust into an ETF for which Coinbase would be the custodian.
The SEC approved Bitcoin Spot ETFs on the basis that the existing market surveillance mechanisms for Bitcoin Futures ETFs that it approved in 2021 were also sufficient for Spot ETFs. Coinbase argues that the same reasoning applies to Ethereum ETF Spot products, as Ethereum Futures Contract and Spot markets are highly correlated.
VIC Crypto compiled
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