SEC pushes back decision on Grayscale Ether futures ETF

The United States Securities and Exchange Commission (SEC) has extended the deadline yet again to decide on the approval of digital asset management firm Grayscale’s Ethereum futures Trust exchange-traded fund (ETF).

In a filing  published  on March 22, the SEC stated that it would postpone the March 31 deadline to May 30 to decide on whether or not to approve Grayscale’s Ethereum Futures Trust ETF, which would focus on investing in Ether  futures contracts.“The Commission finds that it is appropriate to designate a longer period within which to issue an order approving or disapproving the proposed rule change so that it has sufficient time to consider the proposed rule change and the issues raised therein.”

In December 2023, the SEC postponed the approval date for Grayscale’s futures ETF product, stating that it would seek  additional public input  regarding whether the ETF should be listed.

This came only three months after Grayscale  proposed listing and trading shares  of the Grayscale Ethereum Futures Trust ETF under the New York Stock Exchange Arca Rule 8.200-E in September 2023.

Following the listing, Bloomberg ETF analyst James Seyffart claimed that Grayscale was  using its futures ETF application  as a “trojan horse” to influence the SEC’s decision to approve its spot Ether ETF.

He explained that if the SEC approved Grayscale’s application, it would allow Grayscale to argue for the approval of its spot Ether ETF application.

Source: James Seyffart

Meanwhile, on Jan. 25, the SEC delayed its decision on  whether to approve a spot Ether ETF  from Grayscale, also opening the application to public comments.

Following the approval of spot Bitcoin  ETFs on Jan. 10, there has been increased skepticism among crypto industry commentators regarding whether the SEC will take a tougher stance on crypto-based ETFs.

Cointelegraph recently reported that Capital founder John Lo  expects the SEC to put increased scrutiny  on all upcoming crypto-based ETFs, especially Ether ETFs:

“Scrutiny towards cryptocurrency ETFs has only grown, as you could argue to a certain degree that the SEC was forced to approve the Bitcoin ETFs because of its case with Grayscale. No doubt, the SEC internally views that as a huge loss for themselves.”

Other asset management firms are also facing obstacles with their Ethereum ETFs. 

In separate March 4  filings , the SEC announced  that its decision on applications  from BlackRock for its iShares Ethereum Trust and Fidelity for its Ethereum Fund would be delayed.