cryptopolitan.com
The leader in the cryptocurrency asset management field, Grayscale, has unambiguously shelved his application for a futures Ethereum exchange-traded fund (ETF). The 23rd of September 2023 is when Grayscale registered with the Securities and Exchange Commission (SEC), the company has withdrawn its application to the SEC. Grayscale’s decision of withdrawing itself did not indicate any particular reasons, but they might have followed the recent pauses of SEC’s decisions regarding digital currencies, that, for example, included rejection on November 15, decline on December 18, and postponed decision on March 22.
The withdrawal of ETH ETF by Grayscale from the market is surely the position change that the company has outlined finally. One of the vivid cases pertaining to the SEC is the last year ruling in favor of Grayscale Company against its Bitcoin future ETF despite the fact that SEC had approved the Bitcoin future providers which have been acting as a reservoir for the delivery of the crypto in the bounce time of the crypto market.
Analyst discusses Grayscale’s tactical ETF withdrawal
As posed by James Seyffart, an EFT analyst at Bloomberg, the institution might have made the application a strategic move meant to replicate the situation which saw them triumph over the SEC previously. He opined that by approaching the regulator to encourage their approval of the Ethereum futures ETF while denying them the application of an Ethereum spot ETF, the company might have wanted immediate confrontation. On the other side the application withdrawal leaves the taste of retracing the steps, perhaps for the sake of keeping the prosecution litigation at bay.
UPDATE This is interesting. @Grayscale just withdrew their 19b-4 filing for an #Ethereum futures ETF. This was essentially a trojan horse filing in my view, in order to create the same circumstances that allowed Grayscale to win the $GBTC lawsuit (approve futures deny spot) pic.twitter.com/Kihj2dlQx1
— James Seyffart (@JSeyff) May 7, 2024
Social media also fueled speculations about the reasons behind Grayscale’s delisting, with some contesting the potential regulation by the SEC staging a reverse spot ETFs. Seyffart, however, debunked this claim, considering the development being less likely. Grayscale’s strategic legal moves were indeed acknowledged by the judge. Yet, the re-filing of the application was seen as a less impetuous process for the SEC and might be used as a counter action to Grayscale and other parties’ legal concerns.
Ethereum ETF faces regulatory security hurdles
Withdrawal happened in spite of elevated scrutiny and skepticism from analysts towards SEC approval of Ethereum spot ETFs. At the moment, a new round of optimism was fueled by the SEC’s approval of Bitcoin spot ETFs, which may also serve as an indicator of new heights in Bitcoin price and a sweep of upward trends in the crypto market.
There is a growing possibility of the demise of Ethereum spot ETFs with one of the last blow having knocked them terribly last year on the grounds that the SEC thought the Ethereum was a regulated security; the same claim found in an article published that year conflicted with the earlier SEC public message saying there were no plans of regulating the Ethereum.