SEC Seeks Public Input On Invesco And Galaxy Digital’s Spot Ether ETF, Pushing Deadline

07.02.2024 / Payment system news

The United States Securities and Exchange Commission (SEC) has pushed back a decision on greenlighting — or rejecting — a spot ether (ETH) exchange-traded fund (ETF) proposal from asset management behemoth Invesco and crypto firm Galaxy Digital.

SEC Delays Decision On Invesco Galaxy Ethereum ETF

The SEC has delayed a decision on yet another high-profile spot Ethereum ETF application. 

In a Tuesday filing, the SEC said it would institute proceedings to determine whether to approve or deny a proposed rule change that would authorize the Cboe BZX Exchange to list and trade shares of the Invesco Galaxy Ethereum ETF.

The proposed investment vehicle, if given the regulatory green light, would allow investors to gain exposure to the second-largest cryptocurrency, ether, without the hassle of purchasing and storing it themselves.

Bloomberg Intelligence strategist James Seyffart observed in a post on X that the delay decision on the Invesco Galaxy Ethereum ETF was in line with expectations.

“100% expected, and more delays will continue to happen in coming months,” Seyffart said. “The only date that matters for spot ethereum ETFs at this time is May 23. Which is vaneck_us’s final deadline date.”

Invesco and Galaxy jointly filed with the SEC in September 2023. The SEC then published the proposal in the Federal Register on November 8, 2023. The regulator can delay the spot ETH ETF for up to 240 days before arriving at a final decision. 

Comments are due for the Invesco Galaxy Ethereum ETF in 21 days, the SEC said Tuesday. In its filing, the SEC highlighted certain areas where it is seeking feedback, including whether the ETH ETF is correctly filed under the Exchange’s rules for commodity-based trust shares, and whether arguments made for listing Bitcoin ETFs apply as well to an ether spot product.

“Do commenters agree that arguments to support the listing of Bitcoin ETPs apply equally to the Shares? Are there particular features related to ether and its ecosystem, including its proof of stake consensus mechanism and concentration of control or influence by a few individuals or entities, that raise unique concerns about ether’s susceptibility to fraud and manipulation?” the securities watchdog asked in its filing.

Spot ETH ETFs To Arrive By May?

Spot Bitcoin ETFs from nearly a dozen asset managers made their debut on U.S. exchanges on January 11 following historic approval from the SEC. The regulator now has a handful of spot ETH ETF applications on its desk.

While the SEC has thus far pushed back deadlines for multiple spot Ethereum ETF proposals, some market watchers predict that the agency could adopt a similar approach with spot ETH products.

Analysts from British multinational bank Standard Chartered now believe that an ETH ETF could go live by May. The bank has argued that the investment vehicles are likely to win SEC approval because the regulator has not classified ETH as a security.

This view was matched by Bloomberg’s Seyffart, who estimates a robust 70% chance of approval for spot ether ETF by May.