Analysts have discovered new information from a filing made with the United States Securities and Exchange Commission in March, which indicates that the regulator may classify Ether (ETH) as a security.
In a post on May 13, Scott Johnsson, an associate at Davis Polk and Wardwell, examined a filing made by BlackRock on March 4 regarding its application to list and trade a spot Ether exchange-traded fund (ETF) on the Nasdaq. The filing extended the deadline for the commission to make a decision on BlackRock’s spot Ether ETF until June, but it also requested public input on whether the investment vehicle could be categorized as a commodity.
Johnsson stated, “The clear intention is to potentially reject the filing on the grounds that these spot filings are incorrectly categorized as commodity-based trust shares and do not qualify if they hold a security.”
According to ETF analyst Eric Balchunas from Bloomberg, the SEC filing was “buried 50 feet deep in a heap of legal jargon,” but this did not alter his belief that the chances of the regulator approving a spot Ether ETF were “very low.” The SEC must decide whether to approve or reject VanEck’s spot Ether ETF by May 23, which is the first of several applications awaiting a decision.
If the SEC rejects VanEck’s application, it could also reject spot Ether ETFs from ARK 21Shares, Hashdex, Invesco Galaxy, BlackRock, and Fidelity. Grayscale withdrew its spot Ether ETF application on May 7 without providing an explanation. Jan van Eck, the CEO of VanEck, reportedly expressed doubts about the SEC approving his company’s offering in May.
At the heart of the SEC’s decision is whether the commission views ETH as a security or a commodity. Despite numerous previous statements by SEC Chair Gary Gensler affirming that ETH is not a security, reports suggest that the commission is now investigating Ether. Gensler is scheduled to speak at the Investment Company Institute summit in Washington, D.C. on May 23.
Magazine:
SEC, Ripple case nears conclusion, Grayscale withdraws ETF filing, and more: Hodler’s Digest, May 5–11