Ark Invest and 21 Shares abandoned plans to participate in their updated ethereum spot ETF proposal on May 10.
The companies' previous filing on February 7 added a clause detailing that the sponsor (21 shares) intended to stake a portion of the fund's assets through third-party providers.
21 stocks were expected to receive eth as staking rewards and planned to treat the profits as income generated by the fund. The presentation acknowledged the risks that could result from gambling, including losses from reduced penalties and funds inaccessible during linking and unlinking.
The latest submission removes the corresponding section. He maintains broader comments, including possible losses for other validators as a result of staking and the impact of staking on the price of eth.
Bloomberg ETF analyst Erich Balchunas suggested the change could be an attempt to get the application documents into shape “based on comments from the SEC,” but noted that there has been no comment on the application. He suggested the change could serve as a “Hail Mary” or simply provide the SEC with less information on which to base a rejection.
SEC decision looms
The SEC is expected to approve or reject several ethereum spot proposals in the next two weeks.
The regulator is due to decide on VanEck's ethereum spot application starting on May 23, followed by Ark and 21Shares' application on May 24. However, the agency is expected to decide on all similar applications competing simultaneously.
Expectations regarding approval are low. Polymarket odds suggest a 10% chance that ethereum spot ETFs will gain approval by the end of the month, up slightly from 7% the previous week.
Some competing apps include similar proposals regarding eth staking. Franklin Templeton and Fidelity added the ability to gamble in their February filings, while Grayscale added the ability in a March filing.
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mike dalton
Before transitioning to crypto writing in 2018, Mike studied library and information science. He currently resides on the west coast of Canada.
Assad Jafri
A passionate journalist since the 2011 Arab Spring in Yemen, AJ has honed his skills around the world for over a decade. Specializing in financial journalism, he now focuses on crypto reporting.
