Spot Ether ETFs Expected to Receive SEC Approval by May, According to Grayscale CLO
Grayscale’s Chief Legal Officer (CLO), Craig Salm, has expressed his belief that the SEC will approve spot Ether (ETH) exchange-traded funds (ETFs) by May 2024. Salm’s optimism is based on the SEC’s prior meetings with Grayscale, which covered important operational aspects such as creation/redemption procedures, contributions in cash or in-kind, authorized participants (APs), liquidity providers (LPs), and custody issues.
Salm argues that the case for Ethereum ETFs is similar to that of Bitcoin ETFs, as many of the issues previously resolved for Bitcoin ETFs are directly applicable to Ethereum ETFs. The main difference between the two products is the underlying assets. Salm wrote, “In many ways, the SEC already has engaged and issuers simply have less to engage on this time.”
Salm also points to the recent approval of Ether Futures ETFs and their classification as commodity futures as another argument in favor of a positive regulatory outcome. He believes that the high correlation between futures and spot products strengthens the case for approving spot Ether ETFs.
Salm’s sentiments have been echoed by other industry insiders, such as Paul Grewal, the Chief Legal Officer for Coinbase. Grewal argued that there was “no good reason” for the SEC to deny ETH ETP applications, citing statements from several SEC officials who have claimed that ETH is not a security.
However, not all industry observers share Salm’s optimism. Bloomberg ETF analysts Eric Balchunas and James Seyffart have expressed concerns over the SEC’s “lack of engagement,” and have reduced their expectations for an approved spot Ether ETF in May to 25%. Balchunas perceives this stance as intentional rather than mere procrastination.
Currently, the SEC has received filings from various companies including BlackRock, VanEck, ARK 21Shares, Fidelity, Invesco Galaxy, Grayscale, Franklin Templeton, and Hashdex. The deadline for VanECK’s application is May 23.
