U.S. SEC to reject Ethereum spot ETF application next month (from Coinsradar.net)

After meetings with the U.S. Securities and Exchange Commission (SEC) in recent weeks, U.S. issuers and other companies expect the SEC to reject their applications to launch Ethereum spot ETFs tied to the price of Ethereum, according to four people familiar with the matter.

VanEck, ARK Investment Management and seven other issuers have submitted applications to the SEC to list ETFs that will track the spot price of the world's second-largest cryptocurrency after Bitcoin.

The SEC must make decisions on VanEck and ARK's applications by May 23 and May 24, respectively, and the two companies' applications are first in line. Four people who attended the meetings said that recent meetings between issuers and the SEC were one-sided and that the agency's staff did not discuss substantive details of the proposed products.

The people declined to be identified because the talks were private. The SEC, led by cryptocurrency skeptic Gary Gensler, has rejected spot bitcoin ETFs for more than a decade over market manipulation concerns but was forced to approve them after Grayscale Investments won a court challenge. The issuers argued at the meeting that these ETFs and an ETF based on ethereum futures approved by the SEC in October set a precedent for spot ether products and sought to address potential regulatory issues, the people said.

They added that SEC staff listened to their comments but did not articulate specific concerns or ask general questions, suggesting the agency would reject the applications. This would be a setback for the cryptocurrency industry, which had hoped that spot bitcoin ETFs would pave the way for other similar products and push cryptocurrencies into the mainstream. "It looks more likely that approval will be delayed until later in 2024, or longer," said Todd Rosenbluth, head of ETF analytics at data firm VettaFi, who is tracking the issue closely.

"The regulatory situation still seems unclear." Some issuers said they still plan to submit additional disclosure documents to the SEC to continue the dialogue.An SEC spokesman said the commission does not comment on individual applications. VanEck CEO Jan van Eck told CNBC this month that the company's application "will most likely be rejected." ARK did not respond to a request for comment.

At an event this week, ARK CEO Cathie Wood said Ethereum could become a major asset class. Hong Fang, president of cryptocurrency exchange OKX, said the price of ether reflects the expected depreciation. While the cryptocurrency is up 39% this year, it has struggled to keep pace with Bitcoin, which has risen more than 51% and hit a new high last month.

As people build up such expectations, there will be more downward pressure on prices, Fang said. More data The SEC has held only a few meetings on ether products so far, according to sources and SEC records. The only meeting disclosed by the regulator was last month with cryptocurrency exchange Coinbase. The meeting was related to Grayscale's application to convert its Ethereum Trust into an ETF, for which Coinbase is the custodian.

The SEC approved the spot bitcoin ETF on the basis that its existing market surveillance mechanism for the bitcoin futures ETF approved in 2021 is also sufficient for spot ETFs. Coinbase believes that the same reasoning applies to spot ether products because Ethereum futures and spot markets are highly correlated according to SEC disclosures.

If the SEC does reject the Ethereum ETF, some applicants expect it to reject the Ethereum ETF due to some broad issues, such as the nature and depth of the underlying Ethereum market statistics.

Matt Hougan, chief investment officer at Bitwise Asset Management, which has applied for an Ethereum spot ETF, said the agency may believe that it has limited time to observe Ethereum futures. "I think that will be the mechanical reason why it was pushed out because they just want to see more data."

Some industry insiders said that the rejection could lead to another lawsuit. "It is entirely possible that we will eventually see an Ethereum ETF," said one of the sources."But unless someone is rejected and goes to court." #BTC #ETH #ETF #内容挖矿 #TradeNTell。

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