The U.S. Securities and Exchange Commission (SEC) appears to have expressed concerns about the liquidity of ETH futures and its categorization as a security or a commodity, leading Grayscale Investments and Bitwise Asset Management to delay their plans for ETH futures ETFs.
According to reports, the U.S. Securities and Exchange Commission (SEC) has ordered cryptocurrency asset managers Grayscale Investments and Bitwise Asset Management to delay their plans to launch exchange-traded funds (ETFs) for ETH futures.
The issues raised include the futures market’s liquidity and the classification of ETH as a security or a commodity.
It appears that Grayscale has changed its mind on listing an ETH futures product. Grayscale is well-known for its sizable Grayscale Bitcoin Trust. Based on SEC filings and insider information, it may be concluded that this change in approach caused its rivals to adjust their strategies similarly.
Representatives of the SEC have claimed that, at the moment, the regulator is not willing to penalize these goods. This denotes a reluctance to proceed until there is clarification in the area.
Based on a recent SEC filing, Direxion, a fund manager with around 80 U.S.-listed ETFs, is the most recent to withdraw its request for an ETH Strategy ETF.
Additionally, it has been reported that the SEC has requested that numerous prospective issuers withdraw their public files for ETH futures ETFs and hold private discussions instead.
Additionally, it has been reported that the SEC has requested that numerous prospective issuers withhold their public files for ETH futures ETFs and hold private discussions instead.
Another company, Bitwise, withdrew its Ethereum Strategy ETF proposal, which would have mainly concentrated on cash-settled ETH futures contracts on the Chicago Mercantile Exchange (CME).
Following this, Grayscale filed a revised filing stating that it was moving forward with its ETF plans without including the previously announced Ethereum Futures ETF.
Despite the SEC’s approval of bitcoin futures ETFs in 2021, there are questions about whether the ETH futures market is ready for an ETF. VanEck fund manager Matthew Sigel raised concern about the CME ETH futures market’s lack of liquidity.
The SEC may be struggling with issues relating to ETH’s categorization in addition to liquidity issues. According to Morningstar’s Bryan Armour, the SEC has serious concerns about ETH’s classification as a security or commodity.
The SEC is taking a stance that indicates a need for more clarity in the quickly developing world of cryptocurrencies as it continues to carefully consider each proposal within the emerging field of crypto ETFs.