The United States Securities and Exchange Commission (SEC) has once more deferred its decision on the Grayscale Ethereum Futures Trust exchange-traded fund (ETF) application.
Initially set for March 31, the SEC pushed back the deadline to May 30, allowing more time to evaluate the application and address the concerns it raises.
This postponement follows a previous delay in December 2023, when the SEC sought further public feedback on the proposed ETF, which aims to invest in Ethereum futures contracts.
The SEC’s hesitance to make a swift decision underscores its cautious approach, emphasizing the need for thorough consideration: “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.”
Grayscale’s push for the Ethereum Futures Trust ETF began in September 2023, seeking permission to list and trade shares under the New York Stock Exchange Arca Rule 8.200-E.
Bloomberg ETF analyst James Seyffart suggests that Grayscale’s move is strategic, using the futures ETF bid to potentially sway the SEC towards approving a spot Ether ETF.
According to Seyffart, approval of the futures ETF could strengthen Grayscale’s case for its spot Ether ETF.
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The SEC’s deliberation on Grayscale’s spot Ether ETF also lingers, with a decision postponed on January 25, following the call for public comments.
This delay reflects growing skepticism within the crypto community about the SEC’s stance on cryptocurrency-based ETFs, heightened by the approval of spot Bitcoin ETFs on January 10.
Industry observers, like Capital founder John Lo, anticipate increased scrutiny from the SEC on all forthcoming crypto-based ETF applications, particularly those related to Ether.
Lo remarks, “Scrutiny towards cryptocurrency ETFs has only grown… No doubt, the SEC internally views that as a huge loss for themselves,” referring to the SEC’s perceived forced approval of Bitcoin ETFs after its litigation with Grayscale.
The SEC’s cautious stance extends beyond Grayscale, affecting other asset management giants like BlackRock and Fidelity.
In early March, the SEC announced delays in deciding on BlackRock’s iShares Ethereum Trust and Fidelity’s Ethereum Fund, indicating a broader pattern of regulatory hesitation towards Ethereum ETFs.
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