The U.S. Securities and Exchange Commission (SEC) postponed the launch of the spot Ethereum exchange-traded fund (ETH ETF) and asked the issuer to resubmit the S-1 form before July 8. This decision forced the listing plan originally scheduled for July 2 to be postponed, and the new listing time is expected to be in mid-July or later.

Background Overview

Eric Balchunas, senior ETF analyst at Bloomberg, commented on the changes in the SEC’s review process for spot Ethereum ETFs, noting the SEC’s latest decision and its impact on market expectations.

Previously, SEC Chairman Gary Gensler told the Senate last month that a spot ETH ETF is expected to be approved "this summer," providing market participants with a clear expected time frame.

However, as the SEC required issuers to resubmit their S-1 forms by July 8, this expected timetable was forced to adjust, triggering the market to reassess the timing of the final approval and listing of the ETH ETF.

Despite the delay, market expectations for the ETH ETF remain high, and investors and analysts are closely watching the SEC's review results and any further developments that may affect the timing of the launch of the ETH ETF.

SEC Feedback and Next Steps

While reviewing the S-1 registration statement for the spot Ethereum ETF, the SEC decided to return the document to the issuer. The SEC's move was not out of a complete denial of the issuance plan, but out of a need to further clarify and improve the content of the document. The SEC only attached a small number of comments, indicating that the main review work is nearly completed, but there are still some details that the issuer needs to pay attention to and adjust.

At the same time, issuers now face the task of making necessary revisions to the S-1 form based on the SEC’s feedback. This process may include further explanation of financial data, detailed explanation of the fund’s operating mechanism, or more comprehensive disclosure of potential risks. It is important that issuers ensure that all feedback is properly addressed to meet the regulator’s requirements.

In addition, since the SEC's feedback may not resolve all issues at once, issuers may need to prepare for more rounds of negotiations. This means that after submitting a revised S-1 form, the SEC may have further questions or requests, and issuers must remain flexible and responsive to them. Each round of revisions and negotiations is a step towards final approval, so issuers must remain patient and maintain open and transparent communication with the SEC.

Details of the latest round of revisions

In the context of the SEC's requirement to resubmit Form S-1, issuers made key updates to their registration statements in June in an effort to meet regulatory requirements and attract potential investors. Here are some of the key updates:

Update from Franklin Templeton: Franklin Templeton disclosed a 0.19% sponsor fee rate in its registration statement, demonstrating its transparency into operating costs and investor fees. In addition, the firm has offered an attractive promotion of six months of free trading for the first $10 billion in assets. This strategy is designed to reduce initial costs for investors and encourage them to participate in this emerging ETH ETF.

VanEck's update: VanEck also updated its registration statement, disclosing a 0.20% sponsor fee rate. Similar to Franklin Templeton, VanEck has also adopted an incentive plan to waive fees for the first $1.5 billion in assets. This offer may attract a large number of investors, especially in the early stages of the fund, to help quickly increase asset size and establish market influence.

These updates reflect the issuer's proactive response strategy in the face of SEC scrutiny and market expectations. By adjusting the fee structure and providing incentives, the issuer not only demonstrates its response to regulatory requirements, but also conveys the competitiveness and attractiveness of its products to potential investors. With the resubmission of the S-1 form and further review by the SEC, these updates may have a positive impact on the final approval and market acceptance of the ETH ETF.

Seed Investment Disclosure Details

In the preparation process of the spot Ethereum ETF, some issuers also disclosed the seed investment in the previous round of financing. These investments not only provide financial support for the launch of the fund, but also reflect the market's confidence and expectations for such products:

Invesco Galaxy’s Seed Investment: Invesco Galaxy announced a $100,000 seed investment on June 17. The investment was made by purchasing 4,000 shares at $25 per share, demonstrating Invesco Galaxy’s confidence in the successful listing of the ETH ETF and its long-term bullishness on the Ethereum market.

Grayscale’s Mini Ethereum Trust Investment: Grayscale also made a $100,000 seed investment through its Mini Ethereum Trust. This investment acquired 10,000 shares at $10 per share, reflecting Grayscale’s deep involvement in the Ethereum market and recognition of the potential value of an ETH ETF.

FMR Capital’s Seed Investment: As a seed capital investor of Fidelity, FMR Capital purchased 125,000 shares at $37.99 per share on June 4, contributing $4.7 million to the trust. This large-scale investment not only strengthens the fund’s financial strength, but also demonstrates Fidelity’s firm belief in the successful launch of the ETH ETF.

BlackRock’s Seed Funding Report: BlackRock reported that its ETF’s seed funding was $10 million, a figure that highlights BlackRock’s high assessment of the ETH ETF market potential and its optimistic expectations for the fund’s future performance.

The disclosure of these seed investments not only adds momentum to the issuance of ETH ETFs, but also provides a positive signal to the market. Investors and market analysts will pay close attention to the further development of these funds, as well as their performance in the SEC review process and their final listing. As these funds gradually complete the SEC's review requirements, market expectations for spot Ethereum ETFs are also increasing. #ETHETF #加密货币 #SEC

Conclusion

Although the launch of the US spot Ethereum ETF has been delayed, the market's expectations for this financial innovation have not weakened. The SEC's prudent attitude and the issuer's positive response demonstrate a common focus on the interests of investors and the healthy development of the market. At the same time, the significant investment from seed investors further proves the market’s confidence in the ETH ETF.

As the review process deepens, the final approval and listing of the ETH ETF will bring new opportunities to investors and is expected to promote the further maturity of the cryptocurrency market. The market is eagerly awaiting the final decision of the SEC. It is believed that once the ETH ETF is successfully listed, it will mark an important step for Ethereum assets to enter the mainstream financial market.