In a shocking development, American cryptocurrency asset management giant Grayscale Investments has retired is ethereum Spot Exchange Traded Fund (ETF) proposal before the United States Securities and Exchange Commission (SEC). This ruling is made in the context of the regulatory ambiguity surrounding exchange-traded funds in the US that rely on digital assets.
Grayscale recovers its ethereum Futures Trust ETF (eth)
On Tuesday, May 7, Grayscale Investments archived its withdrawal from its ethereum Futures Trust ETF (eth), a proposal that was submitted to the SEC under the Securities Exchange Act of 1934 and related Rule 19b-4. The proposal, submitted in September last year and published in October, aimed to further integrate ethereum into the US regulatory landscape and create broader exposure for eth.
A month after the application was published, the SEC postponed its final decision on whether to approve or disapprove the product, demanding additional time to access the eth spot ETF. In March 2024, the regulatory watchdog again delayed its decision on the exchange fund, citing more time to analyze the proposed rule change. However, almost two months later, the company decided to withdraw its application to convert ethereum Trust (ETHE) into a spot ETF.
This intriguing move came just two weeks after Grayscale filed an S-3 Registration Statement for its ethereum Trust, marking a bold step in its Ether investment services. By filing the S-3 registration statement, Grayscale intends to improve the regulatory compliance and clarity of the eth Trust. With the filing of Form S-3, the asset company met all requirements for the regulatory watchdog to review and rule on its eth ETF proposal.
Pursuant to the Securities Act of 1933, the company filed Form S-3 with the Commission. Grayscale took this important step after NYSE Arca filed Form 19b-4 for the company's ethereum Trust.
The company intended to list its eth ETF on NYSE Arca under the symbol ETHE and issue shares on an ongoing basis following the approval of NYSE Arca's Form 19b-4 application to list shares and the effectiveness of Form S-3 to register the actions. However, the only way to purchase these shares was through a prospectus.
Opinions of the crypto community on the development
Although the main reason behind Grayscale's move has yet to be identified, there are speculations in the community about several potential reasons behind it.
Delving deeper into the topic, Bloomberg Intelligence analyst James Seyffart x.com/JSeyff/status/1787951570711163123″ target=”_blank” rel=”noopener nofollow”>claims The action was basically a Trojan horse to produce similar conditions that allowed Grayscale to prevail in the GBTC litigation with the SEC.
Therefore, he assumes that the SEC writing a permission or rejection letter for an eth futures ETF could be a possible reason why Grayscale withdrew its fund. x/P0PqYcPP/” alt=”ethereum” width=”2283″ height=”1351″/>
eth is trading at $2,991 on the 1D chart | Source: ETHUSDT in x/P0PqYcPP/” target=”_blank” rel=”noopener nofollow”>Tradingview.com
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