Efforts to introduce an Ethereum (ETH) exchange-traded fund (ETF) in the United States are gaining momentum, but the Securities and Exchange Commission (SEC) remains hesitant, as it has traditionally been cautious about cryptocurrency-based products. Despite the recent approval of the first Bitcoin ETF after significant delays, the SEC has yet to comment on ETH-based ETFs.
With the deadline approaching, Ark Invest and 21Shares, led by the renowned Cathie Wood, have made substantial revisions to their ETF spot Ether proposal. In a strategic move, they have removed the option of staking from their proposal. Previously, the document mentioned that the sponsor could stake a portion of the Trust’s assets through trusted providers. This decision seems to be an effort to simplify the approval process by eliminating potentially controversial elements.
This revision comes at a time when staking plays a crucial role in the functioning of the Ethereum network, providing rewards in ETH. The removal of this option by 21Shares could be seen as a conservative maneuver and a strategy to avoid further regulatory obstacles.
Eric Balchunas, an ETF expert at Bloomberg, commented on the proposal update, suggesting that 21Shares is preparing their proposal for SEC review and possibly trying to give the SEC one less reason to reject it.
As the deadline approaches, anxiety mounts over the SEC’s response. Historically, the SEC has taken the full 240 days to decide on such proposals, with many issuers’ deadlines falling in May.
In addition to the SEC’s cautious stance, the ongoing investigation into the Ethereum Foundation and comments from market figures like Michael Saylor, who speculate that the SEC may classify post-merger Ethereum as a security, further add to the uncertainty surrounding the approval process.
While the Commodity Futures Trading Commission (CFTC) recently classified ETH as a commodity, paving the way for the approval of ETH futures ETFs, the SEC has shown resistance to ETH staking, as evidenced by regulatory actions against staking products.
The SEC’s silence keeps ETF issuers on high alert, making adjustments to their proposals in hopes of finding a path to approval. The SEC’s final decision, whether it is approval or rejection, will have a significant impact on the immediate future of Ether-based financial products.
Disclaimer: The views and opinions expressed in this article are for informational purposes only and should not be considered as financial or investment advice. Investing or trading cryptocurrencies carries the risk of financial loss.
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