KEY POINTS
- The regulator has thrown out an initial March 10 decision-making date for BlackRock's application
- It now seeks public comments on BlackRock and Fidelity's applications
- Some experts have said further delays on spot ETH ETFs should be expected
The U.S. Securities and Exchange Commission (SEC) has once again postponed its decision-making for asset management titan BlackRock's application for a spot Ethereum exchange-traded fund (ETF).
In a Monday filing, the regulator said it has not yet reached a conclusion regarding BlackRock's iShares Ethereum Trust application and is now seeking "interested persons to provide comments" regarding the application.
"The Commission asks that commenters address the sufficiency of the Exchange's statements in support of the proposal" for a spot ETH ETF, the regulator said. It also asked commenters to provide answers to several specific questions.
Among the questions raised by the commission were, "What are commenters' views on whether the proposed Trust and Shares would be susceptible to manipulation?" and "What are commenters' views generally with respect to the liquidity and transparency of the ether markets and the ether markets' susceptibility to manipulation?"
The SEC also said the same thing regarding investment firm Fidelity's Ethereum Fund application. It sought public comments on similar questions it laid out for BlackRock.
Comments for both applications are due within the next 21 days, while rebuttals should be filed within the next 35 days, as per the SEC.
The regulator first delayed its decision on BlackRock's application in January, about two weeks after it approved 11 spot Bitcoin ETFs in a historic move that triggered a market-wide rally of cryptocurrencies.
In its January announcement of postponing a decision, the SEC said it "finds it appropriate to designate a longer period within which to take action on the proposed rule change so that it has sufficient time to consider the proposed rule change and the issues raised therein."
At the time, it set a decision for March 10, drawing predictions from some experts that the spot ETH ETF applications will continue to face delays over the next few months.
Bloomberg ETF analyst James Seyffart said earlier last month that the crypto world should "100%" expect "more delays" in the coming months. He further noted that "the only date that matters" for spot ETH ETFs is May 23, which is the final deadline for investment management firm VanEck's spot Ethereum ETF application.
SEC just delayed @InvescoUS & @galaxyhq's #Ethereum ETF. 100% expected and more delays will continue to happen in coming months.
— James Seyffart (@JSeyff) February 6, 2024
The only date that matters for spot #ethereum ETFs at this time is May 23rd. Which is @vaneck_us's final deadline date pic.twitter.com/gkVZL2QuPK
Variant Fund chief legal officer Jake Chervinsky echoed sentiment regarding more cautious expectations in terms of spot Ether ETFs. He pointed out that "legal issues and policy environment in [Washington] DC make denial (or an SEC request to withdraw) more likely."
I’m not saying for certain that the spot ETH ETF won’t be approved by May 23.
— Jake Chervinsky (@jchervinsky) March 3, 2024
I’m just saying that the legal issues and policy environment in DC make denial (or an SEC request to withdraw) more likely than general sentiment suggests.
“Blackrock always wins” is a lazy bull take.
BlackRock and Fidelity filed for spot Ethereum ETFs in November, followed by several other notable companies such as digital currency asset manager Grayscale and investment management giant Franklin Templeton.
