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The SEC is expected to deny applications for ethereum spot ETFs following discouraging meetings with issuers.
The US Securities and Exchange Commission (SEC) is expected to reject applications for spot exchange-traded funds (ETFs) pegged to the price of ethereum, the second-largest cryptocurrency by market value. According a Reuters reportUS financial firms do not expect timely approval of the ethereum ETF to occur in May, citing discouraging meetings with the watchdog in recent weeks.
So far, VanEck, ARK Investment Management and seven other issuers have filed filings with the SEC to list ethereum spot ETFs. The SEC must make decisions on the filings from VanEck and ARK, which are first in line, by May 23 and 24 respectively, the report notes.
However, according to Reuters, recent meetings between issuers and the SEC have been described as one-sided, with agency staff not involved in substantive discussions about proposed products. People say the lack of commitment stands in stark contrast to the extensive and detailed discussions that took place before the SEC gave the green light to detect bitcoin ETFs in early January.
The lack of engagement has led many to believe that the SEC is likely to reject the filings, as its staff did not articulate specific concerns or ask questions during the meetings, sources say. It's worth noting that the SEC's rejection of spot bitcoin ETFs in the past was due to concerns about market manipulation. However, the agency was still forced to approve them after Grayscale Investments won a court challenge, showing that its proposed bitcoin spot ETF closely resembled previously approved bitcoin futures ETFs.
