Applications for spot exchange-traded funds (ETFs) tied to the price of Ethereum are anticipated to be denied by the U.S. Securities and Exchange Commission (SEC) following meetings with issuers that left them disheartened.
According to a report by Reuters, U.S. financial firms are not optimistic about the approval of spot Ethereum ETFs in May, citing discouraging interactions with the regulatory body in recent weeks.
Several issuers, including VanEck, ARK Investment Management, and seven others, have submitted filings to the SEC to list spot Ethereum ETFs. VanEck’s and ARK’s filings, being the first in line, are expected to receive decisions by May 23 and May 24, respectively.
However, sources familiar with the matter revealed to Reuters that recent meetings between issuers and the SEC have been one-sided, with agency staff showing little engagement in substantive discussions regarding the proposed products. This lack of engagement is in stark contrast to the extensive and detailed discussions that preceded the SEC’s approval of spot Bitcoin ETFs earlier in January.
The absence of meaningful dialogue during the meetings has led many to speculate that the SEC is likely to reject the filings. The sources noted that the agency’s staff did not articulate specific concerns or pose questions during the meetings. It’s noteworthy that the SEC’s previous rejection of spot Bitcoin ETFs was primarily due to concerns about market manipulation. However, the agency was compelled to approve them after Grayscale Investments successfully challenged the decision in court, demonstrating that its proposed spot Bitcoin ETF closely resembled previously approved Bitcoin futures ETFs.
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