The Securities and Exchange Commission (SEC) has deferred its decision on the approval of two Ethereum-focused exchange-traded funds (ETFs). The SEC noted the initiation of proceedings for ETF approval in a statement on Monday. The initiation of proceedings does not imply that the Commission has reached any definitive conclusions regarding the matter.
The statement notes, “Institution of proceedings is appropriate at this time in view of the legal and policy issues raised by the proposed rule change,”
ETF approval delays continue
This follows a recent delay on the Invesco Galaxy spot Ethereum ETF application to next year instead of December 23. In November, the SEC extended its verdict on the Hashdex Nasdaq Ethereum and Hashdex Bitcoin futures ETF applications. Additionally, the November deadlines for Franklin Templeton and Global X spot Bitcoin ETFs were also moved to next year.
Hashdex and Grayscale are now both placed among several firms whose applications have been either postponed or rejected.
The delay comes despite the original decision deadline not being due until January 1, 2024. Bloomberg analyst James Seyffart suggests this early announcement could be an attempt by the SEC to clear the application queue. Based on past trends, the SEC website estimates that the EDGAR system experienced some of the highest submissions in December. EDGAR is the digital system used for submitting regulatory filings. Some of the upcoming peak filing dates will occur between December 27 and December 29, during the holiday season.
Seyffart highlighted the SEC’s decision to open a comment period to assess whether Ethereum ETFs should be treated differently from spot Bitcoin ETFs.
The statement noted, “The Commission asks that commenters address the sufficiency of the Exchange’s statements in support of the proposal, which are set forth in the Notice, in addition to any other comments they may wish to submit about the proposed rule change.”
Ethereum vs. Bitcoin ETF
The comparison of Bitcoin and Ethereum ETFs could provide insights into the SEC’s regulatory approach to different crypto ETFs. Meanwhile, the SEC has called for public comments up until December 22, with a deadline for rebuttal comments set for January 5.
Heading into January 2024, US regulators are expected to reach a conclusive verdict on sanctioning a physically-backed Bitcoin ETF. With the deadlines approaching for the spot ETFs, the crypto sector remains hopeful after the recent acknowledgment from SEC chairman Gary Gensler that the agency is reviewing the filings.
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