Van Buren Capital General Partner Scott Johnsson revealed an overlooked detail in the spot Ethereum ETF application in March. Analysts suggested that the filing indicates that the SEC considers ETH a security. They predict that this will be a reason for possible spot Ethereum ETF rejections this month.
“SEC will reject Ethereum ETF applications on ‘securities’ grounds!”
Van Buren Capital General Partner Scott Johnsson revealed an overlooked detail. Accordingly, the SEC will consider Ethereum as a security before spot ETF rejection. In this context, Johnsson shared the following evaluations:
I realize this is widely considered a possibility, but this is your official notification that the SEC is considering the security question for ETH in these upcoming spot ETF offerings. Note that this question has never been asked (afaict) regarding the spot/futures BTC ETF product. The apparent intent is to potentially reject these spot filings on the basis that they are improperly filed as commodity-based trust shares and are ineligible if they hold a security.
Are my spot Ethereum ETFs unlikely to be approved?
Bloomberg ETF analyst Eric Balchunas wrote, “TLDR: The SEC asked commentators on spot Ethereum ETFs whether these filers were properly filing their ETF listing offerings as commodities. This suggests that the SEC is perhaps considering ETH as a security when rejecting it. Our odds of approval remain the same. That is to say, it is almost non-existent.” said. Fellow Bloomberg ETF analyst James Seyffart agrees. Seyffart shared the following comment:
The SEC seems increasingly likely to reject Ethereum ETFs, claiming that Ethereum is a security. There is no guarantee they will do this. However, I think this almost guarantees that the SEC is at least considering this. It’s the first thing I’ve seen in publicly available SEC filings. I personally still think it’s more likely that the SEC will not claim that Ethereum is a security in these denials that will come in the next week or so. But we will find out soon.
Nate Geraci: This would lead to an interagency conflict!
Meanwhile, Nate Geraci, President of The ETF Store, wasn’t so sure if the SEC considers Ethereum a security, asking why the agency would then approve Etheruem futures ETFs. One community member said it is possible for the SEC to say that the ETF is a security. Because he noted that these ETFs are ’40 Act funds’ that can hold commodity or security futures. However, this would “lead to an interagency conflict after the SEC implicitly recognized Ethereum as a non-securitized commodity for years,” Geraci said, adding that this was the “nuclear option,” especially in a US election year.
cryptokoin.comAs you follow from , May 23 and May 24 are critical dates for Ethereum ETF. Because the SEC will decide whether to approve spot Ethereum ETF applications from VanEck and ArkInvest/21 Shares, respectively. Last month, MetaMask developer Consensys claimed that the SEC considered Ethereum a security. This means the SEC is planning to file an enforcement action against the firm.
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