- Leading ETF analyst James Seyffart suggests that the US Securities and Exchange Commission (SEC) may deny several Ethereum ETF applications in May, claiming that the underlying cryptocurrency is a security.
- Finance lawyer Scott Johnsson believes that the SEC will provide a “notice of the grounds for disapproval under consideration”, hinting at Ethereum’s legal status.
- Despite the industry consensus that these applications will be rejected due to lack of engagement with issuers, the exact reason remains unclear. Matt Hougan from Bitwise suggests that insufficient data could be a factor.
The US SEC is expected to reject multiple Ethereum ETF applications in May, citing the cryptocurrency as a security. This development could have significant implications for the crypto industry.
Possible Rejection of Ethereum ETF Applications
James Seyffart, a prominent ETF analyst, has suggested that the SEC may deny several Ethereum ETF applications in May. He believes that the SEC will claim that Ethereum, the underlying cryptocurrency, is a security. This view is shared by finance lawyer Scott Johnsson, who expects the SEC to provide a “notice of the grounds for disapproval under consideration”, which could hint at Ethereum’s legal status.
Implications for the Crypto Industry
The potential rejection of these applications could have far-reaching implications for the crypto industry. Notably, Bitcoin ETFs did not face this issue, suggesting a different regulatory approach to different cryptocurrencies. The SEC is expected to make its final decision regarding VanEck and ARK’s Ethereum ETF filings on May 23 and May 24, respectively. The industry consensus appears to be that these applications will be rejected due to lack of engagement with issuers. However, the exact reason behind this potential rejection remains unclear.
Insufficient Data as a Possible Cause
Matt Hougan from Bitwise suggests that insufficient data could be a reason for the rejection of Ethereum ETF products. Apart from VanEck and Ark Invest, several other big players, including BlackRock and Fidelity, are vying to launch a spot Ethereum ETF. As reported, Grayscale recently withdrew its Ethereum futures filing, indicating that it does not intend to pursue another lawsuit against the SEC. The SEC has faced a lawsuit from Ethereum backer ConsenSys over its attempts to label the leading altcoin as a security. However, BlackRock’s Larry Fink recently stated that such a designation wouldn’t necessarily prevent them from launching an Ether ETF.
Conclusion
The potential rejection of several Ethereum ETF applications by the SEC could significantly impact the crypto industry. While the exact reasons for this possible rejection remain unclear, lack of issuer engagement and insufficient data have been suggested as potential factors. This development underscores the importance of regulatory clarity in the rapidly evolving crypto space.
