Grayscale, a digital asset management company, has requested clearance for its Ethereum Futures Trust exchange-traded fund (ETF) and the United States Securities and Exchange Commission (SEC) has once again delayed the deadline for making this decision.
To decide whether or not to approve Grayscale’s Ethereum Futures Trust ETF—which will concentrate on investing in Ethereum futures contracts—the SEC announced in a filing on March 22 that it would extend the deadline 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 SEC announced in December 2023 that it will seek more public feedback on whether Grayscale’s futures ETF product should be listed, delaying the product’s approval deadline.
This was just three months after Grayscale suggested that in September 2023, shares of the Grayscale Ethereum Futures Trust ETF be listed and traded in accordance with Arca Rule 8.200-E of the New York Stock Exchange.
After the listing, Grayscale was accused by Bloomberg ETF analyst James Seyffart of using its futures ETF application as a “trojan horse” to persuade the SEC to approve its spot Ether ETF.
He clarified that Grayscale would be able to argue for the acceptance of its spot Ether ETF application if the SEC granted Grayscale’s application.
On January 25, the SEC postponed deciding whether to accept Grayscale’s application for a spot Ether ETF and invited public feedback.
Commentators in the crypto industry have grown more pessimistic about the SEC’s potential to crack down on crypto-based exchange-traded funds (ETFs) in the wake of the approval of spot Bitcoin ETFs on January 10.
As recently reported by Cointelegraph, Capital founder John Lo anticipates that the SEC would closely monitor all future exchange-traded funds (ETFs) with a focus on Ether ETFs in particular:
“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.”
With regard to its Ethereum ETFs, other asset management companies are also having difficulties.
The SEC indicated in two different filings on March 4th that it would postpone making a decision on the applications filed by Fidelity for its Ethereum Fund and BlackRock for its iShares Ethereum Trust.