The U.S. Securities and Exchange Commission (SEC) to deny the much-anticipated approval of spot Ethereum ETF, as per sources familiar with the matter. The SEC’s mindset toward approving spot Ether exchange-traded funds was never clear as the SEC tries to classify Ethereum (ETH) as security and delays its decision on spot Ether ETF for several issuers.

US SEC to Refuse Spot Ether ETF Approval

Issuers of spot Ether ETFs and other firms expect denial of their applications next month by the U.S. SEC after bad meetings with the securities regulator in recent week, reported Reuters on April 25.

BlackRock, Grayscale, VanEck, Ark Invest and other issuers have filed with the SEC to approve and list ETF tracking the spot prices of Ether (ETH), similar to spot Bitcoin ETFs. VanEck and Ark Invest are first in line for the SEC’s decision on May 23 and May 24, respectively.

According to people familiar with the matter, the SEC and its staff have shown no interest in the spot Ether ETF and its potential. Four people who participated said the discussions were one-sided.

“It seems more likely that approval will be delayed until later in 2024, or longer,” said Todd Rosenbluth, head of ETF analysis at data firm VettaFi, who is tracking the issue closely. “The regulatory picture still seems cloudy.”

The SEC is taking a similar stance against spot Ether ETF when Gary Gensler-led agency rejected spot Bitcoin ETFs for more than a decade. The Grayscale Investments’ win in a lawsuit against the SEC forced the regulator to consider spot Bitcoin ETF approval, but Gensler was still not interested in it after the approval.

The denial will be a setback for the crypto market as participants believe spot ETFs pave the way for rising adoption of crypto, as seen in spot Bitcoin ETF. Also, spot XRP and SOL ETFs can be expected if the SEC approves the spot Ether ETF.

The SEC has only disclosed one meeting on spot Bitcoin ETF, which was in March. The SEC and Coinbase met to discuss Grayscale’s application to convert its Ethereum Trust into spot Ether ETF.

ETH Price Fall on This News

While Hong Kong regulator has approved spot Bitcoin and spot Ether ETFs and listing is expected on April 30, traders have responded immediately to the news of delay.

ETH price extended drop to over 5%, with the price currently trading at $3,097. The 24-hour low and high are $3,074 and $3,292, respectively. Furthermore, the trading volume has increased by 35% in the last 24 hours.

Ethereum futures OI has also dipped in the last 1 hour, with a 24-hour fall of over 1%. There are 3.49 million ETH futures OI worth $10.82 billion, at the time of writing.

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The post Breaking: US SEC To Deny Spot Ethereum ETFs – Reuters appeared first on CoinGape.

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Filed under: News - @ January 1, 1970 12:00 am