- Grayscale, a leading crypto asset manager, has withdrawn its application to the SEC for an Ethereum futures ETF.
- The firm has not provided a reason for the withdrawal, which comes after multiple delays by the SEC in reviewing the proposal.
- Analysts speculate that the withdrawal could be a strategic move, potentially paving the way for a legal showdown or a re-filing of an amended application.
Grayscale, a prominent crypto asset manager, has unexpectedly withdrawn its application for an Ethereum futures ETF to the SEC. The move has sparked speculation and uncertainty in the crypto market.
Grayscale Withdraws Ethereum Futures ETF Application
Grayscale, a leading name in the crypto asset management sector, has withdrawn its rule change application to the Securities and Exchange Commission (SEC) for an Ethereum futures exchange-traded fund (ETF). The firm has not provided a specific reason for the withdrawal, which was announced on Tuesday. The proposed Grayscale Ethereum Futures Trust ETF had faced multiple delays from the SEC since it was first filed on September 19, 2023.
Speculations Surrounding the Withdrawal
James Seyffart, an ETF analyst for Bloomberg, described the withdrawal as an interesting move, suggesting it could be a strategic decision by Grayscale. “This was essentially a trojan horse filing in my view, in order to create the same circumstances that allowed Grayscale to win the GBTC lawsuit,” Seyffart said. He speculated that Grayscale might want the SEC to “approve futures, deny spot” again, potentially setting up another legal showdown. Seyffart also noted that Grayscale could be planning to re-file an amended application.
Implications for Ethereum Spot ETFs
The withdrawal comes amid increasing skepticism that the SEC will authorize the creation of Ethereum spot ETFs. These were once a promising prospect after the agency allowed the sale of Bitcoin spot ETFs in January. However, the odds of approval for an Ethereum spot ETF have continued to fall, particularly following recent revelations that the SEC allegedly classified Ethereum as a regulated security last year, contradicting public statements that no decision had been made.
Conclusion
The unexpected withdrawal of Grayscale’s application for an Ethereum futures ETF has stirred speculation and uncertainty in the crypto market. Whether this move is a strategic play by Grayscale or a sign of shifting regulatory winds remains to be seen. Regardless, it underscores the ongoing complexities and challenges in the evolving landscape of cryptocurrency regulation.
