SEC Again Delays Eth...

SEC Again Delays Ethereum ETF Applications by BlackRock and Fidelity

By Jody McDonald March 06, 2024 In Cryptocurrency, ETFs, Ethereum, SEC

The SEC has delayed its decision on Ethereum spot ETFs for a second time, having previously delayed in January.
The regulator says the delay will give it more time to consider public feedback and determine whether Ethereum ETFs are more prone to manipulation than Bitcoin ETFs.
A decision is now expected on the deadline date of May 23, with pundits saying a flurry of updated applications before then could indicate an approval is more likely.

The US Securities and Exchange Commission (SEC) has done what almost everyone expected and delayed their decision on Ethereum spot ETFs for a second time, having previously delayed its decision in January of this year.

The decision to delay the decision was announced in filings via the SEC website on March 4, officially putting off any potential move to approve the listing of BlackRock’s iShares Ethereum Trust and Fidelity’s Ethereum Fund ETFs.

Delayed Decisions Par For The Course With Crypto ETFs

The SEC’s playbook here will be familiar to anyone that followed the Bitcoin spot ETFs approvals process, which included numerous delays. In the case of Bitcoin ETFs, the regulator only made the decision to approve on the final deadline date.

The same delaying tactics are expected with the Ethereum ETF decision—the SEC can still choose to delay a third time before they reach the final deadline for a decision on May 23.

In its filing, the SEC also requested input from the public regarding whether they agree with the ETF applicants’ argument that the logic used to approve Bitcoin spot ETFs also applies to Ethereum.

The regulator says it will also use the time to consider whether the Ethereum ETFs may be more prone to manipulation than the BTC ETFs, given the network’s proof-of-stake consensus model.

What To Look For In The Next Few Months

Most crypto market watchers agree that a decision on the Ethereum spot ETFs is unlikely before the May 23 deadline—but will there be any signs to look for that an approval is more likely? According to Bloomberg Intelligence ETF analyst James Seyfartt the answer is yes.

Speaking to CoinDesk, Seyfartt said that investors should look for similar patterns seen prior to the Bitcoin ETFs approval—that is, a flurry of updated ETF applications being submitted to the SEC incorporating specific changes.

Seyfartt says we’ve already seen some updated applications in the past month, but they seem to be incorporating lessons learned from the Bitcoin filings, not any feedback the SEC is giving applicants specifically relating to Ethereum.

We haven’t seen anything that’s relevant specifically to an update that indicates to us for sure that the SEC is talking to any of these guys about a theory, but they are notoriously close-lipped and not supposed to talk to anyone.

James Seyfartt, Bloomberg ETF Analyst

If we do start to see a wave of updated applications just before May 23, with changes addressing specific concerns the SEC has with Ethereum ETFs, it may just signal Ethereum ETFs are likely to be approved.