In a significant development for the cryptocurrency market, the United States Securities and Exchange Commission (SEC) initiated proceedings on Grayscale Investments' application for an ethereum spot ETF and extended the decision period.
Review Period for Grayscale ethereum ETF
Grayscale's application, filed with the SEC on October 10, 2023, sought approval to list and trade Grayscale shares. Ether Trust on the New York Stock Exchange (NYSE) Ark under the commodity-based trust stock rule.
The proposed rule change was published for public comment in the Federal Register on October 27. In response, the SEC provided an extended period to approve, disapprove, or initiate proceedings on the proposed rule change, similar to the Commission's steps before. approving bitcoin spot exchange-traded funds on January 11.
With the initiation of the procedure, the SEC fixed that would analyze “in depth” whether to approve or disapprove the proposed rule change. The Commission's decision to initiate the procedure does not indicate any preconceived conclusions.
Instead, it reflects the need for closer examination of the legal and political issues associated with the ethereum ETF application.
The SEC specifically highlights the need to consider the consistency of the proposed rule change with Section 6(b)(5) of the Securities Exchange Act of 1934, which requires national securities exchange rules to prevent fraudulent and manipulative acts, protect investors and serve the public. interest.
Interested parties are encouraged to provide comments addressing the sufficiency of the Exchange's statements supporting the proposal and any other concerns related to the proposed rule change.
SEC requests comments
The Commission raises several questions for commenters to address, including the appropriateness of listing and trading the shares under NYSE Arca Rule 8.201-E, given the nature of the underlying assets held by the Trust.
The SEC also refers to the exchange's arguments for listing and trading spot bitcoin exchange-traded products (ETPs), seeking additional entry.
Individuals and organizations interested in ethereum ETF applications are invited to submit written data, opinions, and arguments regarding the consistency of the proposed rule change with the Act and its regulations. Although oral presentations are not considered necessary at this stage, the Commission will consider requests for such presentations.
In light of the recent approval of 11 bitcoin spot exchange-traded funds, the Commission's future actions regarding the approval of ethereum ETF applications remain uncertain.
It is also worth considering the classification of ethereum as a “security” by the SEC and how this classification could affect the decision-making process of the 12 ethereum ETF applications. It is important to note that the SEC considers bitcoin to be the only commodity within the cryptocurrency market.
In line with bitcoin's trajectory, ethereum (eth) has undergone a significant correction, witnessing a drop of over 14% in the last 14 days and 11% in the last seven days. As a result, its current price is $2,217.
Featured image from Shutterstock, chart from TradingView.com
