Recently, the US SEC sent a Wells notice to Robinhood Crypto. This triggered various discussions in the market. In particular, the issue of Ethereum ETF, which is awaiting approval from the SEC, came up in the discussions. While some analysts have given up hope on approval, others remain hopeful. The SEC’s latest Wells notice to Robinhood Crypto is highly unlikely to block potential approval of spot Ether ETFs, says a team of JPMorgan analysts led by Nikolaos Panigirtzoglou.
US SEC sent Wells Notice to Robinhood Crypto!
cryptokoin.comAs you follow from , Robinhood Crypto, which offers trading in a variety of cryptocurrencies including Bitcoin and Ethereum, received a Wells notice from the SEC earlier this week. The notice suggested that the SEC could file an enforcement action against the company for alleged securities violations. Currently, the SEC considers most cryptocurrencies, with the exception of Bitcoin, to be securities. The Wells statement also reveals its aggressive approach to this assessment. However, contrary to expectations, Gensler’s SEC did not provide a clear or unambiguous definition of why Ether is considered a security.
Impact on spot Ethereum ETFs
JPMorgan analysts do not see this Wells notification as an obstacle to the approval of spot Ether ETFs. The SEC’s approval process for these ETFs will likely follow a similar pattern to that of Bitcoin, where futures-based ETFs have already been approved. Analysts note that the SEC will face some trouble if it denies approval of spot Ethereum ETFs. In particular, they argue that the SEC will face legal challenges similar to those over Bitcoin spot ETFs.
However, there is another interesting point to note. This does not mean that the SEC’s Wells notice to Robinhood considers Ether to be a security. Panigirtzoglou says Ethereum’s status will be determined by legislation and court proceedings. He also notes that there may eventually be a “medium” category for Ether. This means that it is neither a commodity nor a security.
Will the markets experience disappointment?
Many experts do not expect the potential approval of a spot Ethereum ETF this month. The JPMorgan report shows that, contrary to these expectations, the SEC may not disappoint the markets. Grayscale Ethereum Trust’s net asset value is currently trading at a discount. This is a good indicator that the market is not currently interested in Ethereum ETFs.
Moreover, Grayscale recently withdrew its application for an Ether futures ETF. This is another important indication that the company has chosen to focus on converting its existing Ethereum trust into a spot Ethereum ETF. The SEC is expected to deny approval of spot Ethereum ETFs and move the deadline to May 23 for Grayscale to await a final decision on the VanEck spot Ethereum application.
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