Asset manager Fidelity has submitted an amended S-1 application to the United States Securities and Exchange Commission (SEC) for its spot Ether exchange-traded fund (ETF). The revised application clarifies that the underlying Ether tokens of the ETF will not be staked, as per recent reports.
The Potential Reversal by SEC on Ether ETFs
The SEC’s recent actions come amid reports indicating a potential shift in stance towards spot Ether ETFs, possibly influenced by external pressures. This change has prompted the commission to request ETF issuers to update their 19b-4 filings. The looming decision deadline for the SEC is set for May 23, specifically for VanEck’s Ether ETF proposal.
“I have to say the chances are better than 50-50 now. I am going to go 75%,” senior Bloomberg ETF analyst Eric Balchunas commented on the likelihood of approval for the 19b-4 form.
Bloomberg ETF analyst James Seyffart also emphasized that the approval of S-1 filings is crucial for Ether ETF issuers, underscoring the potential timeframe for this process extending from weeks to months.
Concerns and Speculations Around Approval
Research analyst Matteo Greco from digital asset firm Fineqia International raised concerns about the liquidity of ETH’s markets and its previous classification as a security by the SEC, contributing to doubts surrounding swift approval.
“If rejected, issuers would need to resubmit filings, potentially leading to approval in Q4 2024 or Q1 2025 at best,” Greco pointed out, outlining a possible timeline for approval.
Gains in approval might involve the acceptance of 19b-4 filings while keeping the review process for S-1 filings deliberate. Both 19b-4 and S-1 approvals are prerequisites for the launch of Spot ETH ETFs, necessitating green signals from the SEC.
While dialogues and revisions with the SEC have been commonplace for companies seeking ETF approvals, the activity surrounding spot Ethereum ETF filings has been notably subdued. This quietness has led to widespread expectations of potential disapprovals.
“Most people are universally expecting a disapproval order,” noted Katherine Dowling, general counsel for Bitwise, highlighting the prevailing sentiment in the industry.
