SEC Postpones Decision on Grayscale's Ethereum ETF, Extending Evaluation Period

SEC grants 45-day extension to assess Grayscale's application, potentially shaping the future of Ethereum-based investment products.

The U.S. Securities and Exchange Commission (SEC) has postponed its verdict on the approval or disapproval of a spot Ethereum exchange-traded fund (ETF) proposed by Grayscale .

As per an official document, the SEC has extended the decision-making deadline to January 25, 2024. This extension adds 45 days to the original deadline of December 11, 2023.

Grayscale had submitted an application to the SEC in early October to transform its Grayscale Ethereum Trust (ETHE) into a spot Ethereum ETF. This move made Grayscale the fifth company to apply for such a conversion, following VanEck, HashDex, Galaxy/Invesco, and Ark Invest/21Shares.

After Grayscale’s application, the New York Stock Exchange (NYSE) Arca proposed a rule change to the SEC to list and trade shares of the crypto product on its platform. The SEC then published this proposed rule change for public comment in late October.

With the public comment period now closed, the SEC has chosen to allocate a longer period to decide whether the proposed rule change, which would allow NYSE Arca to list ETHE shares, should be approved or disapproved.

“The 45th day after publication of the notice for this proposed rule change is December 11, 2023. The Commission is extending this 45-day time period. 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 SEC stated.

There is a chance that the SEC may initiate proceedings to determine whether to disapprove the proposed rule change by January 25, thereby further extending the deadline for its decision.

This recent announcement by the regulator comes as the crypto community eagerly awaits the approval of the first spot Bitcoin ETF, with several asset managers, including Grayscale, vying for the spot.

In anticipation of its potential conversion to a spot Bitcoin ETF, Grayscale recently updated the framework of its agreement for the Grayscale Bitcoin Trust (GBTC). This modification aims to ensure fair competition with other spot Bitcoin ETF contenders like BlackRock, Ark Invest, Fidelity, and VanEck.