The highly anticipated launch of spot Ethereum exchange-traded funds (ETFs) in the United States has been delayed due to additional comments from the U.S. Securities and Exchange Commission (SEC).
According to reports, the SEC has returned the S-1 forms submitted by prospective spot Ethereum ETF issuers, requesting that they address the regulator's comments and refile the forms by July 8th. This development is likely to push the launch of these ETFs to mid-to-late July, rather than the initially expected timeline of early July.
The Two-Step Approval Process
The approval of spot Ethereum ETFs involves a two-step process. The first step was the SEC's approval of the issuers' 19b-4 forms in May 2024, which cleared the way for the second step - the review and approval of the S-1 registration statements.
Unlike the 19b-4 forms, which are subject to a specific deadline, the S-1 forms do not have a set timeline for the SEC's review. This means that the launch of the spot Ethereum ETFs is entirely dependent on how quickly the regulator can complete its assessment of the resubmitted forms.
SEC Comments and Resubmission
According to sources, the SEC has returned the S-1 forms to the prospective Ethereum ETF issuers with "light comments," indicating that the issues raised are relatively minor. The issuers have been asked to address these comments and refile the forms by July 8th.
However, the source noted that this resubmission may not be the final filing, suggesting that there could be at least one more round of revisions before the SEC is satisfied and grants final approval for the ETFs to start trading.
Uncertain Timeline for Launch
The delay in the spot Ethereum ETF launch has created uncertainty around the exact timeline for when these products will become available to investors. While SEC Chair Gary Gensler previously stated that the approvals could happen "sometime over the course of this summer," he did not provide a more specific timeline.
Analysts had initially predicted an early July launch window based on the lack of significant commentary from the SEC on the initial S-1 filings. However, the latest developments have pushed that timeline back, with the ETFs now expected to launch in mid-to-late July, or potentially even later, depending on the SEC's review process.
Implications for the Crypto Market
The delay in the spot Ethereum ETF launch is likely to be closely watched by the broader cryptocurrency market. These ETFs are seen as an important step in the mainstream adoption of digital assets, as they would provide investors with a regulated and easily accessible way to gain exposure to Ethereum, the second-largest cryptocurrency by market capitalization.
The prolonged approval process may also raise questions about the SEC's approach to regulating the crypto industry, as the regulator continues to navigate the balance between fostering innovation and ensuring investor protection.
Nonetheless, the eventual launch of spot Ethereum ETFs is still widely anticipated, as it has the potential to further legitimize and integrate cryptocurrencies into the traditional financial system.
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