The US SEC has delayed its decision on converting Grayscale’s ETHE product to a spot Ethereum ETF by another 45 days with the next hearing on January 25, 2024.
The Securities and Exchange Commission (SEC) has announced a postponement in the decision-making process regarding the approval or disapproval of the Grayscale Ethereum Trust’s spot exchange-traded fund (ETF).
In a filing on Tuesday, December 5, the SEC revealed an extension of the timeline for a decision on the proposed ETF by an additional 45 days, shifting the deadline to January 25. The delay provides regulators with more time to thoroughly evaluate the ETF proposal before reaching a final determination. In the official filing, the SEC noted:
“The Commission finds it appropriate to designate a longer period within which to take action on the proposed rule change so that it has sufficient time to consider the proposed rule change and the issues raised therein. Accordingly, the Commission […] designates January 25, 2024, as the date by which the Commission shall either approve or disapprove, or institute proceedings to determine whether to disapprove, the proposed rule change.”
Just like the Bitcoin application, Grayscale seeks to convert its Ethereum Trust ETHE to a spot Ethereum ETF. “As expected Grayscale’s Ethereum trust filing just got delayed,” Bloomberg Intelligence analyst James Seyffart wrote on X. “It was due by 12/6/23 so this is completely normal.”
Demand for Spot Ethereum ETF
The US SEC has recently prolonged its decision-making process on multiple cryptocurrency-related exchange-traded funds (ETFs). Notably, the proposed Hashdex Nasdaq Ethereum ETF, designed to hold both spot ether and futures contracts, faced a delay in its decision. Other financial entities, including BlackRock, are also awaiting regulatory approval to launch spot ether ETFs.
In a significant move, Grayscale Investments, in October, filed a Form 19b-4 seeking the conversion of its Grayscale Ethereum Trust into a spot ETF. The trust, established in March 2019, voluntarily became an SEC reporting company in October 2020. As the largest Ethereum investment vehicle globally, it currently manages assets totaling nearly $5 billion, representing approximately 2.5% of the total ETH in circulation.
Furthermore, Grayscale, along with other entities, has been pursuing SEC approval for the first spot bitcoin ETF in the United States. The SEC, however, has not yet approved any spot ether or bitcoin fund, resulting in delays in decisions on various applications submitted by different entities.