The United States Securities and Exchange Commission (SEC) has postponed its decision on the approval or disapproval of Grayscale’s spot Ether exchange-traded fund (ETF). In a notice dated December 5, the SEC announced an extension of the deadline for evaluating a proposed rule change that would enable NYSE Arca to list and trade shares of the Grayscale Ethereum Trust.
The SEC’s decision to extend the timeline comes in the wake of an appellate court directive in October, instructing the SEC to review Grayscale’s Bitcoin ETF offering. The commission stated that it deems it necessary to allocate a more extended period for evaluating the proposed rule change, allowing sufficient time to consider the related issues. Consequently, January 25, 2024, has been designated as the new deadline by which the SEC will either approve or disapprove the proposed rule change or initiate proceedings to determine potential disapproval.
It is noteworthy that the SEC has not previously approved a spot Bitcoin (BTC) or Ether (ETH) ETF for listing on a U.S. exchange. While the SEC has given the green light to investment vehicles linked to crypto futures, the approval of a spot BTC ETF could potentially lead to simultaneous approvals of similar funds from multiple firms, as suggested by Bloomberg ETF analyst James Seyffart.
Grayscale initially submitted its proposal to the SEC in October, seeking approval to convert shares of the Grayscale Ethereum Trust into a spot Ether ETF. Grayscale joins a list of companies awaiting regulatory decisions, with other applicants for spot crypto ETFs including BlackRock, Hashdex, ARK 21Shares, Invesco Galaxy, VanEck, and Fidelity at the time of publication.