Amid increasing scrutiny from the US SEC, investment heavyweights decided to remove participation elements from their S-1 filings. While experts are guessing at the exact motivation of the ARK and 21 Shares teams, it is still unclear whether other applicants will follow in their footsteps.
Amid increasing scrutiny from the US SEC, investment heavyweights decided to remove participation elements from their S-1 filings. While experts are guessing at the exact motivation of the ARK and 21 Shares teams, it is still unclear whether other applicants will follow in their footsteps.
ARK Ether ETF: ETH staking terms disappear from SEC filing
ARK Invest and 21 Shares removed the description of possible Ether (ETH) staking from their applications to the SEC for the spot launch of ETH ETFs in the US. Fox Business correspondent and frequent commentator on the saga of ETF, Eleanor Terrett, noted this amendment yesterday, May 10, 2024.
Prior to the amendment, companies were reporting to the SEC about plans to join ETH staking following the immediate approval of the Ethereum ETF. Applicants “generally expected” to stake a portion of ETH under management through trusted staking providers.
If this works, ETH staking rewards would be treated as income to the trust and taxed accordingly under relevant IRS guidelines.
Furthermore, the applicants highlighted that staking in ETH is associated with the risk of potential loss of tokens as a result of the “shortcut” procedure in Ethereum’s PoS, as well as the lack of time-limited access to ETH locked in staking contracts. .
American regulators frequently attacked cryptocurrency betting. As Guru-Investingpreviously reported, the SEC turned to trading Kraken for its betting business in 2023.
Even though the issue was resolved, the SEC attempted to sue Coinbase for its staking program, which was allegedly associated with unregistered securities trading.
“One less thing the SEC can use in rejection”: Bloomberg’s Eric Balchunas on an intriguing move
Terrett wondered if we should expect similar moves from other asset managers awaiting timely approval of the ETH ETF and what the exact role of SEC comments is in this process.
Eric Balchunas, senior ETF analyst at Bloomberg, is not so optimistic about the effects of such an unexpected amendment, he stressed in a cheep:
Mmmmm. Interesting. While it may seem like they are getting their filings into shape based on comments from the SEC (which would be good news), there has been no comment. So it’s probably a Hail Mary or maybe trying to give the SEC one less thing to use in their rejection. I’m not sure yet)
Last week, the US SEC once again delayed a decision on spot ETF approvals for Invesco Galaxy. In April 2024, the regulator also did not issue the final verdict on the applications of Franklin Templeton and Grayscale.
Bitcoin spot ETFs were approved by the SEC in January 2024, triggering a significant inflow of money into 11 startup products.
