The US Securities and Exchange Commission (SEC) has several spot Ethereum ETF While it is expected to reject the application, a lawyer specialized in digital assets warned that ETH token may be declared as a security and stated that this development could have serious consequences.
SEC, will make its final decision on VanEck’s application for ETF on May 23, and on ARK Invest/21Shares’ application on May 24. Applications from BlackRock, Fidelity and Grayscale also continue to wait on the SEC’s desk.
In March, the SEC cited possible grounds for rejection of BlackRock’s application and Nasdaq’s proposal to list BlackRock’s Ethereum ETF. One question included in the SEC’s notice was whether Nasdaq made its offer “properly” under exchange rules.
Why Were Ethereum ETF Applications Rejected?
Scott Johnson, general partner at Van Buren Capital, said he found the inclusion of this question meaningful. “The obvious intent of this question is that these spot Ethereum ETF applications may be rejected on the grounds that they may have been improperly filed under commodity-based trust principles if they hold a security,” Johnson commented.
SEC in expected rejection of ETF applications rather than indirectly ruling out digital asset as a commodity EthereumIt may also clearly state that is a regulated security. However, Swan Bitcoin executive director Terrence Yang said that this situation was “very unlikely” and argued that SEC Chairman Gary Gensler and his team were taking a political approach. Yang noted that crypto-friendly politicians, especially Former President Donald Trump, may react to such a decision.
After the SEC approved spot Bitcoin ETFs in January, hopes that spot Ethereum ETFs would receive the same treatment have faded. On blockchain-based prediction platform Polymarket, traders rate the probability of ETFs being approved this month at just 16%. While SEC Chairman Gary Gensler made it clear that Bitcoin is a commodity, he left unanswered questions about the regulatory status of Ethereum as of March.
