SEC to reject Ethereum exchange-traded funds (ETFs) in the upcoming month; Here’s the reasoning behind it
The Securities and Exchange Commission (SEC) has long been the subject of speculation within the crypto community, with many wondering when they will approve a Bitcoin exchange-traded fund (ETF) and what reasons they will give for rejecting applications. However, in January 2024, a significant development occurred when the Court of Appeals made a precedent-setting decision, leading to the approval of nine Bitcoin ETFs. This marked the next stage in institutional adoption and legal recognition. Now, attention has turned to Ethereum, the world’s second-largest cryptocurrency, and whether an ETF for it will be approved.
Several major issuers have submitted their applications to the SEC, but recent reports suggest that it is unlikely any Ethereum ETFs will be approved in May. While these reports are not final or guaranteed, they align with an earlier consensus. Jan van Eck, the CEO of VanEck, along with other issuers, expressed their belief that the SEC would reject the proposed Ethereum ETFs. However, the companies have indicated their intention to submit additional disclosure paperwork in the hopes of keeping the discussions alive.
The SEC has followed a pattern of continuous postponements with pending Bitcoin ETFs, and this trend continues with Ethereum. The decision on VanEck’s Ethereum ETF application, originally scheduled for March, has been postponed to May 23. Similarly, Franklin Templeton’s application has been moved to June 11, and Grayscale’s to June 23.
Meanwhile, a Utah judge has seemingly supported a common criticism of the SEC by the crypto community. The judge ruled in March that the SEC had mishandled a case against DEBT Box, citing a lack of evidence, misrepresentation, and false statements. This decision led to the resignation of two agency lawyers, Michael Welsh and Joseph Watkins, who allegedly faced termination if they didn’t resign.
Overall, the SEC’s handling of crypto regulation and its delays in approving ETFs have raised concerns and sparked controversy within the industry.