The U.S. Securities and Exchange Commission (SEC) has opened a three-week comment period on three Ethereum (ETH) spot exchange-traded fund (ETF) proposals submitted by Grayscale Investments, Fidelity, and Bitwise.
The agency posted a notice Tuesday asking interested parties to provide input on the proposed rule changes.
Despite the recent approval of a Bitcoin (BTC) spot ETF in January, industry analysts are becoming less optimistic about the SEC's willingness to approve a similar product tracking Ethereum. The agency's decision to approve a Bitcoin ETF came after it came under pressure following a significant court defeat against Grayscale. However, SEC officials argue that Bitcoin's approval does not necessarily apply to other cryptocurrencies.
SEC Chairman Gary Gensler emphasized in January that Bitcoin's approval should not be interpreted as reflecting the commission's position on the status of other crypto assets under federal securities laws. The statement raised concerns among investors and industry participants.
The introduction of Bitcoin ETFs has seen a significant increase in investment in Bitcoin, and some are predicting a similar outcome for ETH if the SEC approves the Ethereum Spot ETF. However, according to reports, the SEC is investigating whether ETH should be classified as a security, which would put it under a different legal framework than Bitcoin.
SEC is not an ETF fan
The outcome of the three-week comment period and the SEC's ongoing investigation into ETH's classification will likely have a significant impact on the future of the Ethereum Spot ETF and the broader crypto market. The announcement follows the SEC's discussions with Coinbase in March regarding an Ethereum Spot ETF proposed by asset management firm Grayscale Investments.
The virtual currency exchange briefed regulators on the proposed product that Grayscale filed in October, according to documents related to the meeting. If the proposal is accepted, the Grayscale Ethereum Trust closed-end fund will be converted into a spot ETF.
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