SEC Set to Reject Spot Ethereum ETFs After Disappointing Talks with Issuers
The U.S. Securities and Exchange Commission (SEC) is set to deliver a crushing blow to Ethereum enthusiasts as they prepare to reject applications for spot exchange-traded funds (ETFs) linked to the popular cryptocurrency.
Despite hopes for a May approval, U.S. financial firms have been left disappointed after facing daunting roadblocks and discouraging meetings with the regulatory watchdog.
The highly anticipated spot Ethereum ETFs are making their way to the market, with VanEck, ARK Investment Management, and seven other companies vying for a spot on the SEC’s list. It’s a race to the finish line, with VanEck and ARK leading the pack and the SEC set to make their decisions by May 23 and 24.
Recent meetings between issuers and the SEC have been characterized as one-sided and lacking in substantive discussions, according to Reuters. Sources reveal that agency staff have been disengaged and uninterested in the proposed products.
This stands in stark contrast to the thorough and in-depth discussions that preceded the SEC’s approval of spot Bitcoin ETFs earlier this year.
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According to sources, the SEC’s lack of engagement has sparked speculation that the filings will be rejected. In recent meetings, the SEC staff failed to voice any specific concerns or ask thought-provoking questions, leaving many to question their level of interest. Interestingly, the SEC has a history of rejecting spot Bitcoin ETFs due to fears of market manipulation.
Despite facing resistance, the agency was ultimately compelled to give its stamp of approval. This came after Grayscale Investments triumphed in a legal battle, showcasing how its proposed spot Bitcoin ETF closely mirrored the already sanctioned Bitcoin futures ETFs.