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Launch of U.S.-Based Spot Ethereum ETFs Postponed Due to SEC Review Delays

ByDayne Lee

Jul 1, 2024

Launch of U.S.-Based Spot Ethereum ETFs Postponed Due to SEC Review Delays

The anticipated launch of spot Ether exchange-traded funds (ETFs) in the United States, initially expected as early as July 2, has encountered delays. The U.S. Securities and Exchange Commission (SEC) has extended the review process, pushing the potential launch to mid-July or later.

SEC Review Process

ETF analysts Eric Balchunas and James Seyffart from Bloomberg reported that the SEC is taking additional time to assess the S-1 forms submitted by prospective issuers of spot Ether ETFs. The SEC has provided comments on these forms and requested resubmissions by July 8, indicating that the launch could now be expected around mid-to-late July.

Nate Geraci, president of ETF Store, observed that the recent round of S-1 revisions was relatively minor and anticipated that the SEC would clear the issuers for trading within 14–21 days post-submission. However, the exact timing remains uncertain, with the SEC hinting at a possible summer launch.

Earlier in June, Balchunas had predicted an early July launch based on minimal commentary from SEC staff on the applicants’ S-1 filings. This timeline has now shifted due to the extended review process.

Ethereum ETF Approval Process

The approval of the S-1 forms constitutes the second phase of a two-step process necessary for the ETFs to become operational. The first phase involved the approval of the issuers’ 19b-4 forms, which the SEC approved for eight ETF bidders on May 23. Unlike the 19b-4 forms, the S-1 forms do not adhere to a specific deadline, leaving the timing of the final approvals at the discretion of the SEC.

On June 26, SEC Chair Gary Gensler confirmed that the approval process for the spot Ether ETFs was progressing smoothly. He noted that the timeline for listing these ETFs on stock exchanges could extend into September, emphasizing that the pace largely depends on the responsiveness of the applicants.

Major Issuers and Listing Preparations

Prominent issuers such as BlackRock, Fidelity, 21Shares, Grayscale, Franklin Templeton, VanEck, iShares, and Invesco are involved in the process. Some, like VanEck, have already filed 8-A forms in preparation for listing on exchanges, aiming for a July 8 deadline.

The delay in launching spot Ether ETFs highlights the complexities involved in integrating cryptocurrency products within traditional financial systems. It reflects the SEC’s cautious approach towards digital asset products, ensuring thorough review and compliance with regulatory standards. The eventual introduction of these ETFs is expected to provide a significant boost to the cryptocurrency market by offering institutional and retail investors regulated and straightforward access to digital assets.

As the cryptocurrency community and financial markets await the SEC’s final decisions, the extended review process underscores the challenges and meticulous scrutiny involved in launching financial products based on digital assets. The outcome of this process will likely have substantial implications for the broader adoption and acceptance of cryptocurrencies within regulated investment frameworks.

Featured image credit: Marco Verch via CCNull

Dayne Lee

With a foundation in financial day trading, I transitioned to my current role as an editor, where I prioritize accuracy and reader engagement in our content. I excel in collaborating with writers to ensure top-quality news coverage. This shift from finance to journalism has been both challenging and rewarding, driving my commitment to editorial excellence.

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