BlackRock’s Ethereum ETF stalls as SEC Chair throws cold water

abdelaziz Fathi

The Securities and Exchange Commission (SEC) has extended its timeline to make a decision on BlackRock’s proposed spot Ethereum exchange-traded fund (ETF). According to a filing, the SEC has pushed the deadline to March, citing the need for more time to consider the proposal and related issues.

This delay was detailed in Wednesday’s filing, where the SEC stated, “The Commission finds it appropriate to designate a longer period within which to take action on the proposed rule change so that it has sufficient time to consider the proposed rule change and the issues raised therein.” The new deadline for the SEC to either approve, disapprove, or start additional proceedings on the fund is now set for March 10.

BlackRock, the world’s largest asset manager, filed for the iShares Ethereum Trust in November. The proposed ETF, named “iShares Ethereum Trust,” aims to provide investors with exposure to Ethereum’s price movements through traditional stock exchange channels.

Similarly, Fidelity’s application for its own Ethereum fund was also delayed, as indicated in a filing last week. Also in October, Grayscale Investments, in partnership with NYSE Arca, submitted its own application to the SEC seeking approval to transform the Grayscale Ethereum Trust (ETHE) into a spot Ethereum exchange-traded fund (ETF).

While the crypto community remains divided, with some optimistic and others pessimistic about the prospects of a spot ether ETF, there’s growing speculation that the SEC could approve it as early as May. This speculation follows the SEC’s recent approval of several spot bitcoin ETFs.

However, SEC Chair Gary Gensler has made it clear that the agency’s decision on bitcoin ETFs is specific to bitcoin and should not be interpreted as a broader acceptance of other cryptocurrency products. During a media briefing, Gensler said, “As I said two weeks ago, that which we did with regard to bitcoin exchange traded products is cabined to this one commodity non-security and shouldn’t be read to be anything other than that.”

This clarification came after the SEC approved 11 spot bitcoin ETFs on January 10, following a directive from a D.C. court to re-review a bid for Grayscale’s spot bitcoin ETF application. Gensler highlighted the improved disclosures and stock exchange listings for these bitcoin funds, noting the competitive benefits, such as lower fees, they bring to investors.

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