Experts Analyze Potential Rejection of Ethereum ETF: What’s Next for ETH?

  • Van Buren Capital’s General Partner, Scott Johnsson, has revealed a detail that was overlooked in the spot Ethereum ETF application in March.
  • Analysts suggest that the filing indicates the SEC’s consideration of ETH as a security.
  • This could be a reason for possible spot Ethereum ETF rejections this month.

Van Buren Capital’s Scott Johnsson uncovers overlooked detail in Ethereum ETF application, suggesting SEC may consider ETH a security, potentially leading to ETF rejections.

SEC to reject Ethereum ETF applications on ‘security’ grounds

Scott Johnsson, General Partner at Van Buren Capital, has revealed a detail that was overlooked in the spot Ethereum ETF application in March. According to him, the SEC will consider Ethereum a security before the spot ETF rejection. In this context, Johnsson shared his evaluations: “I am aware that this is widely seen as a possibility, but this is your official notification that the SEC is evaluating the security question for ETH in these upcoming spot ETF proposals.”

Is there no chance of our Spot Ethereum ETFs being approved?

Bloomberg ETF analyst Eric Balchunas said, “TLDR: SEC asked commentators on spot Ethereum ETFs whether these filers appropriately filed their ETF listing proposals as commodities. This shows that the SEC may have considered ETH a security while rejecting it. Our chances of getting approved remain the same. So, slim to none.”

Nate Geraci: This leads to an inter-agency conflict!

Meanwhile, The ETF Store President Nate Geraci was not so sure, questioning why the agency approved Etheruem futures ETFs if the SEC sees Ethereum as a security. A community member said it was possible for the SEC to say the ETF is a security because these ETFs are ’40 Act funds’ that can hold commodity or security futures. However, Geraci said this would lead to an “inter-agency conflict” after the SEC has accepted Ethereum as a non-security commodity for years, especially in a US election year, calling it a “nuclear option”.

Conclusion

As the SEC is set to decide on the approval of VanEck and ArkInvest/21 Shares’ spot Ethereum ETF applications on May 23 and 24 respectively, the overlooked detail in the spot Ethereum ETF application could potentially lead to rejections. The SEC’s consideration of ETH as a security, as revealed by Scott Johnsson, could have significant implications for the future of Ethereum ETFs.

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