According to James Seyffart, one of the leading ETF analysts, it is increasingly likely that the US Securities and Exchange Commission is going to deny a number of Ethereum ETF applications this May on the grounds that the underlying cryptocurrency is a security.
According to James Seyffart, one of the leading ETF analysts, it is increasingly likely that the US Securities and Exchange Commission is going to deny a number of Ethereum ETF applications this May on the grounds that the underlying cryptocurrency is a security.
“It’s not a guarantee that they’re going to do this, but I think it almost guarantees that the SEC is at least considering it,” Seyffart added.
This came after financial lawyer Scott Johnsson opined that Ethereum’s legal status was likely to appear in the agency’s next ETF order.
According to Johnson, the SEC is supposed to provide “notice of the reasons for disapproval being considered.”
The SEC claims it was inappropriate to offer shares of commodity-based trusts since the underlying asset is a security.
Notably, this was not a problem that Bitcoin ETFs had to deal with.
After months of waiting, the SEC is supposed to make its final decision regarding VanEck and ARK’s Ethereum ETF filings on May 23 and 24, respectively.
The industry consensus appears to be that the SEC will reject these requests due to a lack of commitment to issuers. However, it is still unclear what the exact reason for this rejection will be. According to Matt Hougan of Bitwise, Ethereum ETF products will be rejected due to insufficient data.
In addition to VanEck and Ark Invest, other big players including BlackRock and Fidelity are vying to launch an Ethereum spot ETF.
As reported by U.Today, Grayscale, which won a major legal victory against the SEC last year, recently withdrew its “Trojan horse” filing for Ethereum futures. This indicates that he has no intention of filing another lawsuit against the agency.
The SEC has faced a lawsuit from Ethereum sponsor ConsenSys over its attempts to label the leading altcoin as a security. However, BlackRock’s Larry Fink recently stated that such a designation would not necessarily prevent them from launching an Ether ETF.
