Ethereum Spot ETF Hangs in the Balance with SEC Decision Postponed
Many in the crypto community assumed – or perhaps, hoped – that the approval of an Ethereum spot ETF would be a fait accompli as Bitcoin funds began trading in the United States last week. But, as with all things involving the Securities and Exchange Commission (SEC), it’s never as simple as it seems. Today, the SEC announced they will be delaying a decision on whether to approve an Ethereum ETF.
Perhaps we should’ve been prepared for this after the circus of non-decisions and delays that the spot Bitcoin ETF went through, but for the impatient crypto community, it is still a blow that’s coincided with poor market performance.
Fidelity Must Wait Until March 5th at the Earliest
The SEC has moved back its own deadline for approving (or rejecting) Fidelity’s application for a spot Ethereum ETF until March 5th – over a month from now. According to the regulatory body:
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.
In simple terms, the SEC wants more time to go over the application and any potential rules that must be implemented. While some may see the delay as cause for panic, experienced Bloomberg analyst James Seyffart sees no cause for alarm.
That said, the SEC has been a little vague when discussing whether Ethereum should be deemed a security or not. Gary Gensler has been on record accusing various digital assets as being securities (like XRP and SOL), but the SEC has never officially mentioned Ether in the same breath. Back in October, Seyffart pointed out:
…Gary Gensler will not explicitly say whether Ethereum is a security or a commodity, but…by approving Ethereum futures ETFs, they’re [the SEC is] implicitly accepting Ethereum futures as commodities futures.
Hopefully, the same logic will apply to the upcoming Ethereum spot ETF decision.