SEC Delays Spot Ether ETF Launch Amid Regulatory Reviews

The expected launch of the first spot Ethereum ETF in the United States is delayed as the U.S. Securities and Exchange Commission (SEC) has extended its review process. The launch was initially expected to occur in early July, but the timeline has been pushed back to at least mid-July following the SEC’s request for additional amendments to issuers’ S-1 filings.

SEC scrutiny intensifies as release date changes

Bloomberg analysts Eric Balchunas and James Seyffart stressed that the SEC’s call for renewed filings by July 8 could further delay the launch until late July or later. The adjustment comes after the SEC’s meticulous review of the filings, reflecting a cautious stance toward the emerging digital asset ETF market.

Unfortunately, I think we’ll have to postpone our over/under until after the holidays. It looks like the SEC needed extra time to get back to people this week (although again very light touches), and from what I hear, next week is dead because holidays = July 8, the trial will resume and they will launch shortly thereafter … https://t.co/0ZQR7yiBLt

— Eric Balchunas (@EricBalchunas) June 28, 2024

Nate Geraci, president of the ETF Shop, mentioned that despite the minor nature of the recent amendments, the approval timeline remains fluid, with a decision expected within three weeks of the amended filings.

In addition, SEC Chairman Gary Gensler confirmed that while the review process is proceeding smoothly, the actual listing of these ETFs on exchanges may not occur until September. This forecast is based largely on the speed with which the applicants respond to the SEC feedback.

Regulatory steps and market implications

The process for bringing Ethereum ETFs to market involves key regulatory approvals, starting with the approval of Forms 19b-4, which occurred for eight applicants on May 23. Unlike these forms, the S-1 forms required for final approval are not subject to statutory deadlines, which leaves the time to market subject to the SEC’s discretionary review.

This detailed review by the SEC underscores its commitment to protecting investors by ensuring that Ethereum ETFs meet all necessary regulatory standards before entering the market.

As the digital asset landscape continues to evolve, the results of these reviews will set important precedents for the regulation of cryptocurrency investment products in the U.S. market.

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