The SEC has thrown a curveball in the approval process for Ethereum ETFs by returning S-1 forms to their issuers. Initially anticipated to launch next week, these spot Ethereum ETFs will face further delays, as the SEC has requested revisions to the S-1 forms submitted by issuers.
Well… what next?
A Hiccup in the Approval Process
According to experts like Eric Balchunas, senior ETF analyst at Bloomberg, the launch of spot Ethereum ETFs was projected for next week. However, the SEC’s recent feedback has pushed back these timelines. The forms were returned with requests for minor adjustments, requiring issuers to address the comments and resubmit their updated forms.
This suggests that the final approval may be delayed, with at least one more round of filings expected before these ETFs can commence trading.
Deadline for Revisions: July 8
In its latest communication, the SEC has set a deadline for the revised S-1 forms: July 8. The S-1 form is a critical component of the two-stage process that ETFs must complete before they become operational. The first stage—approval of the issuers’ 19b-4 forms—was completed in May. However, there is no set deadline for the S-1 forms, making issuers reliant on the SEC’s review timeline.
Impact on Expected Trading Dates
Previously, there were indications that spot ETH ETFs could begin trading by July 4th. This now appears unrealistic given the latest developments. While SEC Chair Gary Gensler recently hinted that approval could occur this summer, he avoided providing a specific date, leaving issuers and investors in a state of uncertainty. The SEC’s request for minor changes to the S-1 forms suggests that while there are no major issues, these adjustments are necessary to meet compliance standards.
The SEC’s decision has drawn criticism from market participants, especially as Ethereum and the broader crypto market face downward pressure. ETH’s price has dropped over 1% in the past 24 hours, and trading volume has decreased by 8% in the same period, reflecting a waning interest among traders.
Looking Ahead
Despite the current setbacks, the approval process for spot Ethereum ETFs is ongoing. Issuers like BlackRock, Fidelity, 21Shares, Grayscale, Franklin Templeton, VanEck, iShares, and Invesco are working to meet the SEC’s requirements. The market will need to wait for further updates on when these ETFs might finally hit the trading floor.
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