SEC Delays Decision on Fidelity’s Ethereum ETF
The U.S. Securities and Exchange Commission (SEC) has extended the deadline for its decision on Fidelity’s proposed spot Ethereum exchange-traded fund (ETF) to March 5. The SEC stated that it needs more time to consider the proposed rule change and the issues raised. This delay was anticipated by Bloomberg Intelligence ETF analyst James Seyffart, who believes that the crucial dates are in late May.
Fidelity Joins Other Companies in Applying for an Ethereum ETF
Fidelity submitted its application for a spot Ethereum ETF in November 2023, following in the footsteps of BlackRock, Ark Invest/21shares, and VanEck.
Ethereum ETF Approval Likely in 2024
Eric Balchunas, a colleague of Seyffart, expressed confidence that an Ethereum ETF would be approved this year. He believes there is a 70% chance of approval by May. Balchunas argued that the SEC’s approval of Bitcoin futures ETFs has put pressure on them to approve an Ether spot ETF to avoid legal action.
SEC Chair Gensler’s Statement on Spot Bitcoin ETFs
After approving spot Bitcoin ETFs, SEC chair Gary Gensler clarified that the decision only applies to ETPs holding one non-security commodity, Bitcoin. He emphasized that it does not indicate the Commission’s willingness to approve listing standards for crypto asset securities or reflect their views on other crypto assets under federal securities laws.
Gensler’s Stance on Ethereum as a Security
Gensler has not explicitly stated whether he considers Ethereum a security or a commodity during his tenure as SEC chair. However, while teaching at MIT, he mentioned that the SEC considered Ethereum “not a security” due to its decentralization. This aligns with the opinion expressed by former SEC Director of Corporate Finance William Hinman in his speech from June 2018.
CFTC Chair Behnam’s View on Ethereum
Rostin Behnam, chair of the Commodity Futures Trading Commission (CFTC), believes that Ethereum should be classified as a commodity.
Hot Take: Delayed Decision on Fidelity’s Ethereum ETF Reflects SEC’s Careful Consideration
The SEC’s decision to extend the deadline for Fidelity’s Ethereum ETF shows their dedication to thoroughly reviewing the proposed rule change and addressing raised concerns. While this delay was expected, it indicates that the SEC is taking its time to make an informed decision. The approval of multiple spot Bitcoin ETFs has put additional pressure on the SEC to approve an Ether spot ETF. However, it remains uncertain whether Ethereum will be classified as a security or a commodity under SEC regulations. Nevertheless, the crypto community eagerly awaits the SEC’s final decision on Fidelity’s proposal.
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