- Grayscale has withdrawn its 19b-4 application for its Ether futures exchange-traded fund (ETF) with the U.S. Securities and Exchange Commission (SEC)
- The SEC was scheduled to make a final decision on Grayscale’s Ether futures ETF on May 30th
- The SEC will be forced to make a decision on at least one spot Ether ETF application on May 23rd
Grayscale has withdrawn its application for an Ethereum futures exchange-traded fund (ETF), just weeks before the U.S. Securities and Exchange Commission (SEC) was set to make a decision on it. This surprising move comes as the regulatory agency weighs approving spot Ether ETFs.
Background
On September 19, 2021, Grayscale filed a 19b-4 application for an Ethereum futures ETF to be listed on the New York Stock Exchange. The SEC was scheduled to make a final decision on the proposal by May 30.
Initially, some believed Grayscale was strategically using the futures ETF application as a “Trojan horse” to get the SEC to approve a spot Ether ETF. The futures product was seen as more likely to get approved.
However, on May 7 Grayscale withdrew its application entirely, leaving industry observers puzzled as to the reasoning.
The SEC’s Upcoming Ether ETF Decisions
The SEC must decide on other spot Ether ETF applications in May, including VanEck’s proposal by May 23. Other companies like ARK 21Shares, Hashdex, Grayscale, Invesco, Galaxy, BlackRock, and Fidelity also have deadlines over the summer.
In January, the SEC approved spot Bitcoin ETFs from several providers at once after delaying its decision for years. The agency may make a similar sweeping ruling on Ether ETFs in the coming weeks.
Recent comments from SEC Chair Gary Gensler suggest the agency is still undecided about whether to allow spot Ether ETFs. The cryptocurrency does not yet have the same regulatory clarity as Bitcoin.
By withdrawing its futures ETF bid, Grayscale avoids a likely rejection by the SEC that could have prejudiced the regulatory body against also approving the spot ETFs. The company may be bowing out temporarily to increase the chances that spot Ether funds get approved in May or June.
