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Tron blockchain founder Justin Sun says the US Securities and Exchange Commission (SEC) would not approve an ethereum exchange-traded fund (ETF) in May.
On April 28 twitter.com/justinsuntron/status/1784609758076703224″>mail On x (formerly twitter), Sun noted that the crypto industry still needs to prepare for long-term education with regulators, especially to help them understand how the emerging industry operates.
“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,” Sun said.
Sun's stance echoes the sentiments of numerous market analysts who anticipate that the SEC will dismiss pending ethereum ETF applications.
For example, Bloomberg ETF analyst Eric Balchunas put the chances of the SEC greenlighting an ethereum spot ETF in May at 25%. He attributed this skepticism to the SEC's less active involvement in the application process than during the bitcoin ETF period.
Furthermore, recent speculation suggests that the agency led by Gary Gensler has initiated efforts to classify eth as a security, prompting Consensys' lawsuit against the Commission.
Furthermore, comments from recent meetings with the SEC indicate a pessimistic outlook, and approval prospects appear bleak.
These revelations have reduced the probability of approval of an ethereum ETF to 11%, its lowest level this year, according to Polymarket. ethereum-etf-approved-by-may-31?tid=1714376816113″>data
However, some optimism remains as ETF issuers like BlackRock and Grayscale continue to update their applications despite silence and expected rejection.
Notably, asset management firm Franklin Templeton's ethereum spot ETF appeared on the Depository Trust and Clearing Corporation (DTCC) website despite the SEC deferring its decision on the ETF application on April 23.
Craig Salm, chief legal officer at Grayscale, said the US SEC's lack of engagement with ethereum spot ETF applicants would not be a deal-breaker hampering the prospects for such products.
“Investors want and deserve access to ethereum in the form of a spot ethereum ETF and we believe the case is as strong as it was for spot bitcoin ETF,” Salm said.
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