SEC delays making a decision on spot Ethereum ETF proposals from Franklin Templeton, Grayscale
Quick Take
- The agency pushed its timeline to make a decision to June 11, 2024, after which the SEC could approve or disapprove or institute proceedings.
- The SEC also delayed making a decision on a spot Ethereum ETF proposal from Grayscale.
- Optimism for a spot Ethereum ETF has fallen over the past few months.
The U.S. Securities and Exchange Commission is delaying making decisions on the next steps for two proposed spot Ethereum exchange-traded funds proposed by Grayscale and Franklin Templeton.
The agency pushed its timeline to decide to June 11, 2024 for the Franklin Ethereum ETF after which the SEC could approve or disapprove or institute proceedings, the SEC said in a filing on Tuesday.
"The Commission finds it appropriate to designate a longer period within which to take action on the proposed rule change so that it has sufficient time to consider the proposed rule change and the issues raised therein," the SEC said.
Franklin Templeton filed its S-1 registration statement for the Franklin Ethereum ETF in February. The fund would generally reflect the price of ether and Coinbase Custody Trust Company and the Bank of New York Mellon would be the custodians, the firm said.
The SEC also delayed a similar proposal for the Grayscale Ethereum Trust on Tuesday.
Grayscale filed a Form 19b-4 alongside NYSE Arca in October to convert the Grayscale Ethereum trust to a spot ether ETF. Grayscale has also previously filed to convert its Grayscale Bitcoin trust to a spot bitcoin ETF, which it did successfully after a court victory and eventual approval from the SEC in January.
The SEC set its next deadline to decide whether to approve or disapprove of Grayscale's Ethereum spot ETF to June 23, 2024, according to Tuesday's filing.
The SEC has delayed decisions on applications for other Ethereum ETFs including VanEck's spot Ethereum ETF and one from BlackRock.
Big-name firms, including Fidelity and BlackRock, have applied for a spot ether ETF over the last few months. Optimism for the SEC approving such a product has steadily fallen over the past few months. For example, Bloomberg ETF analyst Eric Balchunas has lowered his estimate of the chances of a spot Ethereum ETF approval by May from about 70% to 25%.
Since being listed in January 2024, U.S.-traded spot bitcoin ETFs have brought in a cumulative total net inflow of $12.38 billion, The Block previously reported.
Updated on April 23 at 1:10 p.m. ET time to include filing from Grayscale.
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