SEC Delays Decision On BlackRock’s Proposal

Speculation surrounding the approval of an Ethereum (ETH) spot exchange-traded fund (ETF) is creating expectations among crypto investors. After the historic approval and launch of the Bitcoin Spot ETF in the US in January, all eyes are now on May 23rd.rd deadline.

In a recent development, the U.S. Securities and Exchange Commission (SEC) has postponed its decision on whether to approve or reject BlackRock’s Ethereum ETF proposal for the second time. Instead, US regulators are currently seeking public feedback on investment products based on the second largest cryptocurrency.

BlackRock’s iShares Ethereum Spot ETF not yet approved

BlackRock filed for an ETH Spot ETF in November 2023. The company’s offering for iShares Ethereum Trust is designed to closely track Ether’s price performance.

Fidelity, another giant in the asset management industry, submitted a proposal for an Ethereum Spot ETF in the same month as BlackRock. Other companies, including Franklin Templeton, Grayscale, and Ark Invest, have also applied for exchange-traded products (ETPs) and are awaiting SEC approval.

In January, U.S. regulators postponed the timeline for a decision on BlackRock’s proposal to March. The commission said it was “appropriate” to designate a longer review period to consider the proposed rule changes for listing and trading the iShares Ethereum Trust’s shares and “the issues raised therein.” He claimed to have determined that there was.

Now in March, U.S. regulators have delayed their decision again.Monday filing indicates that the SEC is “commencing proceedings under Section 19(b)(2)(B) of the Act to determine whether the proposed rule change should be approved.” I am.

As explained in the document, the initiation of proceedings does not indicate that the regulator has reached a decision. The SEC believes this action is appropriate given the “legal and policy issues raised by the proposed rule changes.”

The Commission has begun a process that will allow for additional analysis of the proposed rule changes’ consistency with section 6(b)(5) of the Act. The law requires, among other things, that the rules of domestic securities exchanges be “designed to prevent fraudulent activity.” “To protect investors and the public interest.”

US SEC seeks feedback from public

The regulator decided to seek feedback from the public, asking commenters to address “the sufficiency of the statements in support of the proposal (…) as well as any other comments they wish to submit on the proposed rule change.” I asked.

Regarding the feedback requested, this document lists six main concerns for which interested commenters may specifically submit their views and appropriate data to support them.

Questions in the document include whether the arguments put forward by the exchange in support of listing a Bitcoin ETP apply similarly in the case of Ether. and whether the unique characteristics of the Ethereum ecosystem, such as “concentration of control and influence by a small number of individuals,” make Ether susceptible to fraud and market manipulation.

Comments may be submitted from the date of publication in the Federal Register until 21 days after publication. Submissions of rebuttals to others’ public submissions must be sent within a maximum of 35 days from the date of publication in the Federal Register.

Analyst views on approval

Previously, ETF experts such as James Seifert and Eric Balchunas had expressed optimism about Ethereum ETF approval in May of this year. As reported by Bitcoinist, Seifert said that after the January delay, it will most likely be postponed to March.

Jake Chervinsky, attorney and CLO at Variant, recently shared his perspective. Chervinsky did not rule out the possibility of approval by May 23.

But he sees the legal issues and policy environment in Washington, D.C., as tipping the scales in favor of denials or demands for revocation.layer I will consider If a withdrawal request is made and is likely to be denied by the asset manager, the SEC will write a denial order explaining the reasons. However, “ETFs are no good anyway.”

ETH is trading at $3,762.61 in the 1-day chart. Source: TradingView.com

Featured image from Unsplash.com, chart from Tradingview.com

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