The U.S. Securities and Exchange Commission (SEC) has announced a postponement of its decision on Franklin Templeton's proposed Spot Ethereum ETF, extending the deadline until June 11, 2024. The news comes from a filing published today and will impact the future of this financial product. Undecided for the time being.
The proposed ETF, first filed in February, aims to track the price of Ether and would use Coinbase Custody Trust Company and Bank of New York Mellon as custodians.
Franklin Templeton’s Spot Ethereum ETF decision postponed: SEC extends deadline to June 2024
The SEC’s decision to extend the review period is due to the need for additional time to thoroughly evaluate the proposed rule changes and the complex issues surrounding Ethereum’s classification and suitability for spot ETFs. This is what happened.
As the SEC stated, “The Commission will take longer to take action on proposed rule changes to ensure sufficient time to consider the proposed rule changes and the issues raised therein.” We have determined that it is appropriate to specify a period.
This cautious approach follows the successful conversion of a Bitcoin trust earlier this year and reflects a similar delay in Grayscale's proposed Ethereum trust, which aims to convert into a Spot Ether ETF.
The move comes amid a surge in applications for spot crypto ETFs, with industry giants such as Fidelity and BlackRock joining the fray.
Analysts such as Bloomberg's James Seifert initially predicted a May decision, saying, “Many analysts believe that the SEC will decide to list the Spot Ether ETF on a U.S. exchange in May, within the deadline. “We presume that a final decision will be reached on whether to approve the transaction.” We respond to applications from multiple asset management companies. ”
My cautiously optimistic attitude towards the ETH ETF has changed over the past few months. Currently these in this round believe that he will finally be rejected on May 23rd. The SEC has not engaged with issuers about the details of Ethereum.exact opposite #bitcoin ETFs this fall. https://t.co/TyAzAOrAC5
— James Seyffert (@JSeyff) March 19, 2024
However, recent SEC delays dampened expectations. Seifert himself expressed skepticism, suggesting that the Ether ETF application may ultimately be rejected.
Bloomberg analyst Eric Balciunas highlighted the heightened uncertainty and revised his approval probability from 70% to a more conservative 35%.
Despite regulatory hurdles and low expectations, market appetite for crypto investment vehicles remains strong.
💸 Latest data shows US spot #bitcoin Total net inflows for the ETF were $12.39 billion, with daily net inflows of $62 million on April 22nd. pic.twitter.com/4AdnI4sqJG
— Crypto.com Research & Insights (@cryptocom_rni) April 23, 2024
The SEC's approval of Spot Bitcoin ETFs in January 2024 led to significant inflows, with these ETFs having attracted cumulative net inflows of $12.39 billion at the time of writing.
Spot ETH ETF approval uncertain as SEC takes cautious approach
Adding to the complexities surrounding Spot Ethereum ETFs, the SEC recently opened a public comment period regarding potential approval. Specifically, the committee is seeking feedback on the proposal from Bitwise Ethereum Trust, Fidelity Ethereum Fund, and Grayscale Ethereum.
This move follows the SEC's approval of several spot Bitcoin ETFs in January 2024. However, SEC Chairman Gary Gensler cautioned against interpreting this as an endorsement of crypto assets or their regulatory status.
Despite initial optimism, the chances of a Spot Ethereum ETF being approved now appear to have diminished considerably. Industry insiders, such as VanEck CEO Jan van Eck, have voiced skepticism about the prospects for approval, suggesting his application may be rejected.
CoinShares CEO Jean-Marie Mognetti echoed similar sentiments, predicting that the SEC's inaction on pending filings will be prolonged.
Adding to the pressure, Democratic Sens. LaFonza Butler and Jack Reed filed a lawsuit against SEC Chairman Gensler, citing concerns about potential risks to investors and insufficient regulatory safeguards. , urged caution in approving crypto-based ETFs.
