The U.S. Securities and Exchange Commission (SEC) is reportedly planning to reject applications for spot Ethereum exchange-traded funds (ETFs) after unsatisfactory meetings with issuers.
During recent talks with US financial institutions, the SEC indicated skepticism over approving spot Ethereum ETFs in May. These speeches, which have been described as sad, have made the environment for businesses waiting for regulatory approval bleak.
VanEck, ARK Investment Management, and seven other companies—all of which have filed SEC forms to list spot Ethereum ETFs—are requesting clearance. According to a Reuters story, VanEck and ARK’s files are especially significant since they are the first for regulatory examination. Decisions are anticipated by May 23 and May 24, respectively.
However, sources with knowledge of the situation indicate that the recent discussions between issuers and SEC representatives have not yielded anything. These talks, characterized as one-sided, have not included any significant participation from the agency in the suggested ETF products. This is a far cry from the lengthy and intricate talks in January before the SEC approved spot Bitcoin ETFs.
Ethereum ETFs Lack of Meaningful Dialogue Raises Speculation
Many have conjectured that the SEC is inclined to reject the files because there hasn’t been any substantive discussion during these meetings. Sources point out that, in contrast to their past approach during conversations, SEC personnel did not express any particular concerns or ask questions about the proposed Ethereum ETFs.
It is important to remember that worries about possible market manipulation were the basis for the SEC’s earlier rejection of spot Bitcoin ETFs.
Notwithstanding these reservations, Grayscale Investments successfully contested the decision in court, forcing the government to accept them. This court struggle revealed that Grayscale’s proposed spot Bitcoin ETF should be accepted by regulators since it resembled previously approved Bitcoin futures ETFs.
Issuers and stakeholders are awaiting the SEC’s ultimate ruling, which could have a big impact on Ethereum’s future in conventional financial markets. The status of spot Ethereum ETFs is in doubt.
