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The U.S. SEC delayed the decision on Grayscale and Franklin Templeton proposals.
Grayscale planned to spin off a Mini Ethereum Trust after ETHE conversion to ETF.
The SEC has postponed making a decision on the plans for Grayscale and Franklin Templeton to launch an Ethereum [ETH] ETF in the US markets.
The SEC has delayed its rulings on Franklin Templeton’s and Grayscale’s application until the 11th and 23rd of June respectively.
The SEC made a statement about the postponed transformation of Grayscale Ethereum Trust (ETHE) into an ETF, expressing:
The Commission decides to allow more time for issuing an order on the proposed rule change, with Amendment No. 1 included, in order to thoroughly examine both the proposal and the concerns it raises.
Grayscale unveils plan to spin off ETHE to a Mini Trust
The SEC revealed the postponed verdict on April 23rd. Coincidentally, Grayscale unveiled plans that day for creating a smaller Ethereum Trust (Mini ETH), which may offer reduced fees compared to their existing ETHE product.
Part of the statement read,
“Our intention is for Ethereum ($ETH) to emerge as a separate entity, birthed from Ethereum Trust ($ETHE). The 14C outlines the procedures for distributing shares of Grayscale’s Ethereum Mini Trust to ETHE shareholders, assuming regulatory consent is granted.”
Other ETH ETF proposal initiatives were happening concurrently, as described by Bloomberg ETF analyst James Seyffart in his summary of recent events.
There’s been a lot of activity regarding Ethereum ETFs on the Ethereum network. Grayscale has filed for conversion of its Ethereum product and is expecting SEC approval. The SEC has delayed decisions on Grayscale’s and Franklin Templeton’s applications. Meanwhile, BlackRock has submitted an amendment to its ETF application with the SEC.
In response to Seyffart’s recap, Eric Balchunas, an ETF analyst at Bloomberg, characterized the action as a “futile” effort to gain the SEC’s notice.
He emphasized,
“The summary provided covers all that has transpired, potentially serving as a strong push to attract the SEC’s notice, albeit probably an unsuccessful attempt. Previously, we held a negative view on approval and maintain that stance today.”
Many ETH investors are likely shifting their attention towards Hong Kong ETFs in response to the deeper setback of the proposed US spot ETH ETF being rejected.
On the prediction market platform Polymarket, the probability of Ethereum US ETFs receiving approval before May has fallen beneath 15%.
Starting from the 30th of April, Ethereum-based ETFs focusing on Ethereum tokens in Hong Kong will start trading publicly. The issuers have announced plans to keep their fees under 1%, indicating an impending price war in the industry.
At present, Ethereum (ETH) is being traded at $3150. It remains to be determined if the Hong Kong ETFs will push Ethereum up towards $4,000 again.
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2024-04-25 11:19