Grayscale’s Surprising Withdrawal from ETH Futures Application
Amid Ethereum’s volatility and its pending application for the spot ETF, Grayscale has retracted its 19b-4 filing for the Ethereum futures ETF. This decision has triggered speculation within the crypto community regarding the possible reasons behind this action. Some speculations suggest that the SEC may have influenced this decision.
Grayscale Investments has caused ripples in the crypto sector by pulling back its application for the Ethereum Futures ETF. Although the investment firm has remained tight-lipped about the rationale behind its move, the crypto community has offered its perspective. Furthermore, Fox Journalist Eleanor Terret has highlighted potential reasons behind Grayscale’s decision to withdraw its Ethereum Futures ETF application.
Bloomberg ETF Research Analyst, James Seyffart, described the filing as employing a “trojan horse” strategy. Furthermore, he proposed that Grayscale sought to emulate the conditions that facilitated the approval of their GBTC Bitcoin ETF.
Furthermore, Seyffart pointed out that Grayscale could capitalize on the inconsistent nature of SEC rulings. He referenced Grayscale won the lawsuit by emphasizing the SEC’s approval of Bitcoin futures-based ETFs while rejecting spot Bitcoin ETFs. The analyst added that Grayscale should have pursued similar success with an Ethereum futures ETF.
However, the institution made a surprising reversal and gave up on the opportunity. Seyffart speculated that this decision may have been influenced by the SEC. He suggested that the SEC have held discussions with Grayscale executives and persuaded them to withdraw the Ethereum futures ETF.
Meanwhile, the SEC continued to delay its decision regarding the spot Ethereum ETFs application which might have contributed to Grayscale’s recent decision. The SEC’s recent filing suggests a requirement for further scrutiny of the proposed rule change for the Invesco Galaxy Ethereum ETF.
This type of SEC approach reflects the wider regulatory uncertainty surrounding crypto offerings. Despite Grayscale’s Ethereum Trust being registered, hurdles remain apparent as highlighted by the SEC’s recent request for further public feedback.
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