No Hope for Spot Ethereum ETF Approval in the US, Says Variant’s Chief Legal Officer
Variant’s Chief Legal Officer, Jake Chervinsky, is not optimistic about the possibility of the United States Securities and Exchange Commission (SEC) approving spot Ethereum exchange-traded funds (ETFs) this year. Chervinsky believes that the SEC is trying to avoid backlash similar to what it received when it approved spot Bitcoin ETFs. He argues that granting approval for an Ethereum ETF would only invite more criticism.
According to Chervinsky, the SEC has enough justification to deny the applications for Ethereum ETFs if it chooses. Although these justifications may be incorrect legally, the SEC is not afraid to take a wrong legal stance as long as it satisfies its political priorities.
Applicants Awaiting Decision from the SEC
Several investment asset management firms, including BlackRock and Grayscale, have submitted applications for spot Ethereum ETFs to the SEC. BlackRock submitted its application back in November 2023, before receiving approval for its spot Bitcoin ETF called iShares Bitcoin Trust (IBIT). Grayscale, led by Michael Sonnenshein, also filed its application a month before BlackRock.
Grayscale requested a conversion of its Ethereum Trust (ETHE) into a spot Ethereum ETF and filed Form 19b-4 with the U.S. SEC along with NYSE Arca. Other asset managers such as Franklin Templeton, VanEck, ARK 21Shares, and others have also shown interest in offering spot Ethereum ETFs.
All of these applicants are now waiting for the SEC to make a decision on their proposals. However, the regulator has been delaying its decision-making process. The SEC extended Grayscale’s review period after setting a deadline of January 25. The supposed approval date for BlackRock’s spot Ethereum ETF is still March 10, but there might be another extension by the regulator.
Hot Take: No Spot Ethereum ETF Approval in Sight
It seems unlikely that the United States SEC will approve spot Ethereum ETFs anytime soon. The SEC is wary of facing backlash similar to what it experienced when it approved spot Bitcoin ETFs, and granting approval for an Ethereum ETF would only invite more criticism. Applicants like BlackRock and Grayscale are eagerly awaiting the SEC’s decision, but the regulator has been stalling in making a determination.
Overall, the outlook for spot Ethereum ETFs in the US remains uncertain, and investors will have to wait longer to see if these investment products will be made available.
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