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In a major growth for the cryptocurrency market, the United States Securities and Exchange Commission (SEC) has initiated proceedings on Grayscale Investments’ utility for a spot Ethereum ETF and prolonged the decision deadline.

Review Period For Grayscale’s Ethereum ETF

Grayscale’s utility, filed with the SEC on October 10, 2023, sought approval for itemizing and buying and selling shares of the Grayscale Ether Trust on the New York Stock Exchange (NYSE) Arca beneath the Commodity-Based Trust Shares rule. 

The proposed rule change was printed for public remark within the Federal Register on October 27. In response, the SEC supplied an prolonged interval to approve, disapprove, or institute proceedings on the proposed rule change, just like the Commission’s steps earlier than approving the Bitcoin Spot Exchange Traded Funds on January 11.

With the initiation of proceedings, the SEC stated that it could “thoroughly” analyze whether or not to approve or disapprove the proposed rule change. The Commission’s determination to institute proceedings doesn’t point out any preconceived conclusions.

Instead, it displays the necessity for additional examination of the authorized and coverage points related to the Ethereum ETF utility.

The SEC particularly highlights the necessity to think about the proposed rule change’s consistency with Section 6(b)(5) of the Securities Exchange Act of 1934, which requires nationwide securities alternate guidelines to stop fraudulent and manipulative acts, defend traders, and serve the general public curiosity. 

Interested events are inspired to offer feedback addressing the sufficiency of the Exchange’s statements supporting the proposal and some other considerations associated to the proposed rule change.

SEC Requests Feedback 

The Commission poses a number of questions for commenters to handle, together with the appropriateness of itemizing and buying and selling the shares beneath NYSE Arca Rule 8.201-E, given the character of the underlying belongings held by the Trust. 

The SEC additionally references the Exchange’s arguments for itemizing and buying and selling spot Bitcoin exchange-traded merchandise (ETPs), in search of additional input.

Interested people and organizations of Ethereum ETF functions are invited to submit written knowledge, views, and arguments in regards to the proposed rule change’s consistency with the Act and its laws. Although oral displays are usually not deemed obligatory at this stage, the Commission will think about requests for such displays.

In mild of the current approval of 11 Bitcoin spot exchange-traded funds, the Commission’s future actions concerning the approval of Ethereum ETF functions stay unsure. 

It can be price contemplating the classification of Ethereum as a “security” by the SEC and the way this classification may impression the decision-making strategy of the 12 Ethereum ETF functions. It is necessary to notice that the SEC views Bitcoin as the only commodity inside the cryptocurrency market.

In line with Bitcoin’s trajectory, Ethereum (ETH) has undergone a major correction, witnessing a decline of over 14% within the final 14 days and 11% up to now seven days. As a outcome, its present worth stands at $2,217.

Featured picture from Shutterstock, chart from TradingView.com