The US Securities and Exchange Commission (SEC) has postponed its decision on Grayscale Ethereum Futures Trust’s Ethereum ETF application until May 30. This postponement led to speculation about the SEC’s stance towards cryptocurrencies and specifically the largest altcoin, Ethereum (ETH).
SEC announced its decision for altcoin ETH
Under the Securities Exchange Act of 1934, the SEC has 180 days or six months to approve or reject a proposed rule change. Grayscale filed its ETF application in September, and the SEC delayed its decision in November. In its latest filing, the SEC said:
The Commission considers it appropriate to establish a longer period of time before making a decision to approve or deny the proposed rule change in order to have sufficient time to review it and address the issues therein.
Bloomberg ETF analyst James Seyffart suggested that the delay was to be expected and that Grayscale was strategically maneuvering to gain final approval of a spot Ethereum ETF. Seyffart emphasized that Grayscale’s approach was intentional, noting the SEC’s history of approving ETH futures ETFs.
Ethereum price remained under pressure
As it is known, the Ethereum community has joined forces with Solana against the SEC’s ongoing allegations of security breaches. Meanwhile, ETH has fallen nearly 18% since its peak on March 11. At the time of writing, ETH price is trading at $3,326, down 5.16%, and its market cap is at $400 billion.
SEC’s stance became a matter of debate
Alex Thorn, head of firmwide research at Galaxy Digital, expressed skepticism that spot Ethereum ETFs will be approved in May. Thorn described the SEC’s lack of adequate attention to ETF applicants and subpoenas sent to cryptocurrency firms regarding their dealings with the Ethereum Foundation as a shadow on the approval.
According to Fortune, the SEC is waging an “energetic legal campaign” to classify ETH as a security and is issuing subpoenas to US companies as part of the investigation. Thorn suggested that the SEC is reviewing the ICO of ETH with the Ethereum Foundation and may consider treating the current trading of ETH as securities trading.
Thorn argued that if the SEC pursued securities violations allegations against ETH or the Ethereum Foundation, it would be “treading on difficult ground in law, regulatory precedent, and an industry that is more than a decade old.” The SEC’s decision to postpone the Grayscale Ethereum ETF application and its stance against ETH is causing uncertainty in the cryptocurrency market. The SEC’s upcoming decision will be an important indicator for the future of Ethereum and cryptocurrencies in general.
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