The U.S. Securities and Exchange Commission (SEC) has recently announced that it is delaying its decision on Grayscale’s application for a spot Ethereum exchange-traded fund (ETF). The review period has been extended, and the new deadline for a decision is now set for January 2024.
According to the SEC’s latest filing, the commission has designated January 25, 2024, as the new deadline, replacing the previous due date of December 11, 2023. The SEC explained that this postponement is necessary to provide a longer period for comprehensive consideration of the proposed rule change and the associated issues.
The Commission 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. – U.S. Securities and Exchange Commission (SEC)
By January 25, 2024, the SEC will either approve or disapprove Grayscale’s proposed spot Ethereum ETF application, or it may institute proceedings to determine whether to disapprove it.
This delay in decision-making highlights the cautious approach of the SEC when it comes to integrating digital assets such as Ethereum and Bitcoin into mainstream financial products. It is part of the regulatory body’s ongoing scrutiny of crypto-based ETFs.
Meetings with Major Financial Institutions
The SEC has been actively engaging with major financial institutions that have filed for their crypto ETFs, including Grayscale and BlackRock. A memorandum published by the SEC revealed that officials from the agency’s Division of Trading and Markets recently met with Grayscale Investments on November 29 to discuss the proposed conversion of Grayscale’s listed Bitcoin Trust into a spot Bitcoin ETF.
It is worth noting that the SEC has previously delayed decisions on various ETF filings, including those from Global X, Franklin Templeton, and Hashdex. As stated by ETF analyst James Seyffart, this postponement is considered “completely normal.” Seyffart also mentioned that once the SEC approves a crypto ETF, multiple applications can potentially be approved concurrently.
