Ethereum spot ETF approval in May unlikely, says Justin Sun

Belief in near-term ethereum ETF approval is fading in the face of growing skepticism. Justin Sun, founder of the TRON Foundation, has expressed doubts about the possible approval of a spot ethereum exchange-traded fund (ETF) in the next month.

“My honest opinion (NFA) is that an ethereum ETF will not be approved in May. The cryptocurrency industry still needs to prepare for long-term education with regulators, focusing on helping them understand cryptocurrencies. But we've always been here, right? Sun stated in a recent post on x.

His comments reflect a broader sentiment within the industry that regulators still do not fully understand the fundamentals of cryptocurrencies.

The crypto industry has long been actively engaging with regulators, but progress appears stalled. Sun is not the only person frustrated by the slow progress of cryptocurrency regulation.

“I think regulatory regimes are less successful when trying to analyze cryptocurrencies through the lens of traditional finance. You say, 'Well, is it a bit of a security? Is it a commodity?'…No, it's none of those things. It's crypto,” Oliver Linch, CEO of Bittrex Global, crypto-firms-slam-sec-washington-for-lack-of-clarity-on-rules.html” target=”_blank” rel=”noopener nofollow noreferrer”>saying in an interview with CNBC.

Skepticism is growing, particularly after people involved in meetings between the SEC and issuers told Reuters the possibility is slim. Large institutions like JPMorgan and Bernstein also share this doubt about the SEC's alleged lack of interaction.

However, there are still glimmers of optimism. The participation of BlackRock, known for its high success rate (576 ETFs approved and only one rejection), raises hopes about possible approval.

The grayscale perspective also offers some counterpoints. Craig Salm, chief legal officer at Grayscale, believes the SEC's lack of engagement with applicants is not a deal-breaker. He noted that the SEC interacted with issuers during the approval process for bitcoin spot ETFs, and those solutions could also apply to ethereum.

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1/ Lately there has been a lot of talk about the spot twitter.com/hashtag/ethereum?src=hash&ref_src=twsrc%5Etfw” target=”_blank” rel=”nofollow noopener noreferrer”>#ethereum ETF. Personally, I am not discouraged by this and believe ETFs should be approved. But now I want to talk about what I think the perceived “lack of SEC commitment” should look like right now:

—Craig Salm (@CraigSalm) twitter.com/CraigSalm/status/1772360837094691302?ref_src=twsrc%5Etfw” target=”_blank” rel=”nofollow noopener noreferrer”>March 25, 2024

SEC decisions on VanEck and ARK's filings are expected on May 23-24. With the prevailing pessimistic view, an approval would be a pleasant surprise, while a delay or rejection potentially impacts the market in the short term.