Efforts to introduce a spot ETH ETF in the United States are becoming more intense, but they are facing continued hesitation from the Securities and Exchange Commission (SEC), which has traditionally been cautious about cryptocurrency-based products. Despite significant delays, the first spot Bitcoin ETF was recently approved, but the SEC remains silent on Ether-based ETFs.
With the deadline approaching, Ark Invest and 21Shares, led by the renowned Cathie Wood, have made significant revisions to their proposal for a spot Ether ETF. In a strategic move, they have removed the option of staking from their proposal. Previously, the document stated that “the sponsor may, from time to time, stake a portion of the Trust’s assets through one or more trusted staking providers.” This decision seems to be an attempt to simplify the approval process by eliminating potentially controversial elements.
This revision comes at a time when staking is a crucial component of the Ethereum network, offering rewards in ETH. The removal of this option by 21Shares could be seen as both a conservative maneuver and a strategy to avoid further regulatory obstacles.
Eric Balchunas, an ETF expert at Bloomberg, commented on the proposal update, stating, “21Shares is leaving its proposal ‘in shape’ for SEC comment.” He suggests that this may be a tactic to “give the SEC one less thing to use in its rejection.”
As the deadline approaches, there is growing anxiety about the SEC’s potential response. Historically, the SEC has taken the full 240 days to make a decision on such proposals, and for many issuers, this window will end in May.
In addition, the ongoing investigation into the Ethereum Foundation and comments from market figures like Michael Saylor, who suggest that the SEC could classify post-merger Ethereum as a security, only add more uncertainty to the process.
The SEC has also shown resistance to ETH staking, as evidenced by regulatory actions against staking products. However, the Commodity Futures Trading Commission (CFTC) recently classified ETH as a commodity, leading to the approval of ETH futures ETFs.
The SEC’s silence has ETF issuers on high alert, making adjustments to their proposals in the hope of finding a path to approval. The SEC’s final decision, whether it is approval or rejection, will be crucial in shaping the immediate future of Ether-based financial products.
Disclaimer: The views and opinions expressed in this article are for informational purposes only and do not constitute financial, investment, or other advice. Investing or trading cryptocurrencies carries the risk of financial loss.
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