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Fidelity Removes Staking From Ethereum ETF Filing as SEC Asks CBOE, Nasdaq to Update Filings

source-logo  thecryptobasic.com 21 May 2024 11:45, UTC

The U.S. SEC reportedly asks leading exchanges seeking to list shares of Ethereum spot-based exchange-traded funds (ETFs) to update important documents relating to the product.

Reuters, citing three sources familiar with the matter, reported that the SEC asked exchanges, like CBOE and Nasdaq, to quickly update their 19b-4 filings ahead of a crucial deadline this week. According to Reuters, the move suggests that the SEC could approve the filings.

By Thursday, May 23, the SEC will decide whether to approve or deny CBOE’s application to list Ethereum ETF shares from Ark Investments/21Shares and VanEck.

Sudden U-turn

Before now, the securities regulator had little to no engagement with exchanges and issuers regarding the details of the ETF filings. This limited engagement, coupled with the recent scrutiny of past Ethereum-related transactions, stirred speculations that the agency could deny these ETF applications.

Surprisingly, on Monday, the SEC asked Nasdaq and CBOE to modify their 194-b filings quickly.

However, despite the renewed optimism, this does not guarantee that the Ethereum ETFs will be approved and listed for trading this week. Asset management companies, including VanEck, seeking to offer these products still need the SEC to approve their S-1 applications.

SEC Could Delay Decision on Issuers’ Ethereum ETF Applications

Nate Geraci, co-founder of The ETF Institute, emphasized that the SEC must approve both the exchange filings and S-1 applications for spot-based Ethereum ETFs to commence trading in the United States.

He speculated that the SEC could approve the exchange filings and delay its decision on the S-1 applications, given the agency’s low engagement with prospective issuers.

SEC decision deadline this week on spot eth ETFs…

SEC must approve both the 19b-4s (exchange rule changes) & S-1s (registration statements) for ETFs to launch.

Technically possible for SEC to approve 19b-4s & then slow play S-1s (esp given reported lack of engagement here).

— Nate Geraci (@NateGeraci) May 19, 2024

Despite this, Bloomberg’s ETF analysts, Eric Balchunas and James Seyffart, increased the odds of the SEC approving exchanges’ applications to list Ethereum ETF to 75%, up from their previous forecast of 25%.

A quick note, @EricBalchunas and increased odds to 75% for spot #Ethereum ETF approvals. But that's for the 19b-4 May 23rd deadline (@vaneck_us's deadline) We also need S-1 approvals. It could be weeks to months before we see S-1 approvals and thus a live Eth ETF h/t @NateGeraci

— James Seyffart (@JSeyff) May 20, 2024

Fidelity Amends Ethereum ETF Filings

Meanwhile, top asset manager Fidelity Investments has modified its S-1 application for a spot-based Ethereum ETF.

In its initial filing, Fidelity stated that it would stake some assets from its prospective Ethereum fund with a staking provider. However, in the updated filing, Fidelity removed every word relating to staking, suggesting that the SEC might not permit staking.

US asset management giant Fidelity has filed an amended S-1 application with the United States Securities and Exchange Commission (SEC) for its spot Ether exchange-traded fund (ETF). Bloomberg analysts believe the probability of passage has increased to 75%.…

— Wu Blockchain (@WuBlockchain) May 21, 2024

In the meantime, the price of Ethereum reacted positively to the news, as it is currently up 23.1% over the past 24 hours to $3,795, riding on the back of the broader market resurgence.