Bitrabo Editorial
Grayscale Investments, a major American cryptocurrency asset manager, has surprisingly withdrawn its proposal for an Ethereum Spot Exchange-Traded Fund (ETF) with the US Securities and Exchange Commission (SEC). This decision comes amid uncertainties surrounding digital asset-backed exchange-traded funds in the US regulatory environment.
Grayscale Retracts Ethereum Futures Trust (ETH) ETF
Grayscale Investments officially withdrew its Ethereum Futures Trust (ETH) ETF proposal filed under the Securities Exchange Act of 1934 and Rule 19b-4 with the SEC on Tuesday. The proposal aimed to enhance Ethereum’s presence in the US regulatory framework and provide broader exposure for ETH. The proposal was initially submitted in September and made public in October last year.
After a month of publicizing the proposal, the SEC postponed its decision on the ETH spot ETF, seeking more time for evaluation. In March 2024, the regulatory body delayed its ruling once again, indicating further analysis was needed. However, nearly two months later, Grayscale decided to withdraw its request to convert the Ethereum Trust (ETHE) to a spot ETF.
This significant move followed Grayscale’s submission of an S-3 Registration Statement for its Ethereum Trust just two weeks prior, signaling a strong commitment to its Ether investment services. By filing the S-3 registration statement, Grayscale aimed to improve regulatory compliance and transparency for the ETH Trust.
Following NYSE Arca’s Form 19b-4 submission for Grayscale’s Ethereum Trust, the company submitted the S-3 form to the SEC as per the Securities Act of 1933. Grayscale intended to list its ETH ETF on NYSE Arca under ticker ETHE, offering shares continuously upon NYSE Arca’s share listing approval via Form 19b-4 and the effectiveness of Form S-3 for share registration. Shares were proposed to be available for purchase solely through a prospectus.
Community Insights on the Situation
While the exact reason behind Grayscale’s decision remains unclear, there are various speculations within the crypto community regarding possible motives. Bloomberg Intelligence analyst James Seyffart suggested that the move could be a strategic filing to replicate conditions that previously benefited Grayscale in a legal battle with the SEC over GBTC.
Seyffart implied that a potential SEC decision on an ETH futures ETF might have prompted Grayscale to withdraw its ETF proposal.
ETH is currently trading at $2,991 on the 1D chart | Source: ETHUSDT on Tradingview.com