SEC Requests Revisions on Proposed Ethereum ETFs, Delaying Launch

The U.S. Securities and Exchange Commission (SEC) has called for additional revisions to the S-1 forms submitted for the proposed spot Ethereum exchange-traded funds (ETFs), pushing back their anticipated launch date of July 2. 

The regulatory body has set a new resubmission deadline of July 8, indicating a possible delay in the trading commencement of these financial products.

The regulatory review process extended

The latest update from the SEC suggests that the review process for the Ethereum spot ETFs will extend beyond the initial timeline. Bloomberg ETF analysts Eric Balchunas and James Seyffart noted that the SEC’s prolonged evaluation of the S-1 forms might postpone the launch to mid-July or later. Nate Geraci, President of the ETF Store, shared that the recent requests for revisions were relatively minor and projected that the SEC would likely authorize trading within two to three weeks following compliance with their feedback.

The SEC’s review process involves a two-stage approval sequence for the ETFs to become operational. The first stage was completed in May with the approval of the issuers’ 19b-4 forms, a crucial step that was achieved before a significant regulatory deadline. Unlike the 19b-4 forms, the S-1 documents are not subject to a rigid submission deadline, allowing the SEC flexibility in its review timeline.

Timeline and issuer responses

SEC Chair Gary Gensler has indicated that approvals for the Ethereum ETFs could occur “sometime over this summer,” although a specific date remains undecided. He remarked that the approval proceedings were progressing smoothly, involving major financial entities such as BlackRock, Fidelity, 21Shares, Grayscale, Franklin Templeton, VanEck, iShares, and Invesco.

Issuers like VanEck have already submitted 8-A forms in preparation for potential listing, aiming to finalize listings on stock exchanges by the newly set July deadline. The timeline for the Ether ETF listings will largely depend on how promptly and effectively the applicants can address the SEC’s latest comments.

Implications and industry perspective

Investors and industry experts closely watch the developments surrounding the Ethereum spot ETFs, given their potential to provide a regulated investment vehicle for cryptocurrency on significant stock exchanges. While this delay is a setback, it also underscores the thoroughness of the SEC’s approach to new financial products tied to digital assets.

Market participants remain hopeful that the completion of this regulatory phase will lead to the successful launch of the ETFs, providing a significant boost to Ethereum’s visibility and accessibility in the investment community. As the July 8 deadline approaches, all eyes will be on the issuers’ responses to determine the immediate future of these much-anticipated financial instruments.

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