US SEC Delays Grayscale Ethereum Spot ETF

Grayscale's application to convert its trust into an ethereum spot ETF has been delayed by the US SEC.

The SEC deferred its decision on a proposed rule change to allow US national exchanges to list and trade ethereum (eth) spot ETFs introduced by Grayscale until June 23.

“The Commission believes that it is appropriate to designate a longer period within which to issue an order approving or disapproving the proposed rule change so that it has sufficient time to consider the proposed rule change, as modified by Amendment No. 1, and the issues raised in it.”

US SEC website

In October, Grayscale filed a Form 19b-4 with NYSE Arca, requesting permission from the SEC to transition its existing ethereum Trust (ETHE) to a spot eth ETF. The company introduced the same process for its GBTC product, which it successfully converted into a bitcoin (btc) spot ETF in January.

Following the SEC's latest move, Grayscale x.com/Grayscale/status/1782865362830475606″ target=”_blank” rel=””>archived Form S-3 to register under the US Securities Act and expand efforts for its ETHE offering.

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Documents on the Wall Street regulator's website also showed that a similar application filed by asset manager Franklin Templeton was delayed until June 11, crypto.news previously reported on April 23.

Other filings from issuers BlackRock, Fidelity, and VanEck seeking ethereum spot ETFs have also been delayed as the SEC buys time to decide whether to accept or reject these offers. Analysts have surmised that a staking feature added to some apps may worry SEC Chairman Gary Gensler, who has repeatedly insisted that most crypto assets are securities.

Since then, btc spot ETFs have racked up over $12 billion in cumulative net inflows despite massive outflows from Grayscale's fund. GBTC outflows reached $1.6 billion earlier this week, losing 50% of previously managed volume.