SEC Delays Decision on Grayscale’s Spot Ethereum ETF Until January 2024

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Hongji Feng

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Hongji Feng

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Hongji is a crypto and tech reporter. He graduated from Northwestern University's Medill School of Journalism with a Bachelor's and a Master's. He has previously interned at HTX (Huobi Global),...

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December 5, 2023

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The U.S. Securities and Exchange Commission (SEC) has postponed its decision on Grayscale‘s application for its spot Ethereum exchange-traded fund (ETF), extending the review period with a new deadline set for January 2024.

According to the SEC’s latest filing, the commission has now designated Jan. 25, 2024, as the new deadline to replace the previous due date of Dec. 11, 2023. The filing stated that this postponement is to allow a longer period for comprehensive consideration of the proposed rule change and the issues it entails.

SEC Postpones Grayscale’s Ethereum ETF Decision

In their explanation, the SEC wrote, “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.”

By Jan. 25, the SEC “the Commission shall either approve or disapprove, or institute proceedings to determine whether to disapprove” Grayscale’s proposed spot Ethereum ETF application.

The ongoing scrutiny by the SEC over crypto-based ETFs, including both Ethereum and Bitcoin, underscores the cautious stance of the regulatory body towards integrating these digital assets into mainstream financial products. This extended deadline for Grayscale’s Ethereum ETF is a continuation of the SEC’s pattern of diligently assessing the viability and impact of such investment choices in the U.S. market.

Meetings and More Delayed Decisions

The SEC has been holding meetings with major financial institutions that have filed for their crypto ETFs, including Grayscale and BlackRock. A memorandum published by the SEC indicated that officials from the agency’s Division of Trading and Markets met with Grayscale Investments on Nov. 29 to consider the proposed conversion of Grayscale’s listed Bitcoin Trust into a spot Bitcoin ETF.

Previously, the SEC has delayed its decisions on numerous ETF filings, including Global X’s, Franklin Templeton’s, and Hashdex’s.

Update: As expected @Grayscale's Ethereum trust filing just got delayed. It was due by 12/6/23 so this is completely normal. pic.twitter.com/I6LXMZIGGN

— James Seyffart (@JSeyff) December 5, 2023

The Commission has not yet approved any spot Bitcoin or Ethereum ETF applications for listing on a U.S. exchange. According to Bloomberg Intelligence ETF analyst James Seyffart, the postponement is “completely normal.” Seyffart believed that once the authority decides to finally approve a crypto ETF, multiple applications can be approved simultaneously.