US SEC Considering Probable Reasons to Deny Spot Ethereum ETF This Month

 US SEC Considering Probable Reasons to Deny Spot Ethereum ETF This Month

The SEC’s approval of spot Ethereum ETF hinges majorly on how the regulators perceives ETH: as a security or a commodity.

Several reports over the last month suggest that the US Securities and Exchange Commission (SEC) is considering assigning a ‘security’ status to Ethereum (ETH). This has cast a shadow over the approval of the spot Ethereum ETF, scheduled later this month.

Analysts Davis Polk and Wardwell Associate Scott Johnsson recently reviewed BlackRock’s filing of spot Ethereum ETF from March 4. Later, the SEC delayed the deadline for BlackRock’s application to June calling for public feedback on whether they should consider the investment vehicle as a commodity.

“The obvious purpose is to potentially deny on the basis that these spot filings are improperly filed as commodity-based trust shares and do not qualify if they are holding a security,” said Johnsson.

Bloomberg ETF analyst Eric Balchunas remarked that the SEC filing was “deeply buried in legal jargon,” but this didn’t alter his belief that the regulator’s chances of approving a spot Ether ETF were “extremely low.” The SEC faces a decision on whether to greenlight or reject VanEck’s spot Ether ETF by May 23, which marks the first of several pending applications in the queue.

If the US SEC denies VanEck’s spot Ethereum ETF application on May 23, it could further deny similar applications from Invesco Galaxy, Hashdex, ARK 21Shares, Fidelity, and BlackRock. VanEck CEO Jan van Eck himself isn’t confident and doubts whether the SEc would approve their application this month.

The decision on spot Ethereum ETF hinges majorly on whether the SEC considers ETH  as a security or commodity. Despite numerous public statements from Chair Gary Gensler asserting that ETH was not classified as a security, reports indicate that the commission has initiated an investigation into Ether.

Ethereum Price Action

The world’s largest cryptocurrency Ethereum (ETH) has continued to face strong selling pressure over the last month and struggled to hold up above $3,000. As of press time, the Ethereum price is trading just above its crucial support of $2,900. Failing to hold this could trigger another 10% correction.

In his latest analysis, crypto analyst Michael van de Poppe suggests that Ethereum (ETH) is approaching the final stage of its correction. According to van de Poppe, Ethereum may experience a further decline of approximately 10% before reaching a higher timeframe support level. However, he remains optimistic, indicating that better times may be on the horizon in the coming weeks.

Funds & ETFs, Market News, News

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