Key Points
- US SEC delays decision on VanEck Ethereum ETF, raising doubts about its approval.
- Reports suggest that the SEC is considering classifying Ethereum as a security asset.
The possibility of the United States Securities and Exchange Commission (SEC) giving the green light to the spot Ethereum (ETH) exchange-traded funds (ETFs) has significantly decreased recently, just before the May 23 deadline.
This could be because the SEC is trying to manage a situation where institutional investors are applying for spot ETFs for the rest of the altcoin industry, led by Solana (SOL), and XRP, which is backed by Ripple Labs. Additionally, there are reports that the SEC is considering categorizing Ethereum as a security asset.
SEC Delays Decision on VanEck Ethereum ETF
On March 20, the SEC released a 45-page document detailing the delay in their decision to approve or disapprove the proposed rule change to list and trade shares of the VanEck Ethereum ETF. The regulatory body stated that it requires more time, despite the rapidly approaching deadline.
The SEC’s decision was largely anticipated, especially after they made a similar decision regarding the Hashdex and ARK 21Shares spot Ethereum ETFs earlier in the week.
The SEC noted that the absence of an ETP holding spot ETH ETP exposes US investors to significant risks. Furthermore, the SEC indicated that it might treat Ether Futures ETFs and spot Ether ETPs differently.
As a result, US investors may miss out on the bullish wave as institutional investors in Europe and Canada have access to spot Ether ETFs.
Ethereum as a Security?
Recent reports suggest that the SEC is investigating several companies as part of its efforts to classify Ethereum as a security asset. The SEC might be examining Ethereum’s ICO, despite the well-known Hinman email stating that Ether is not a security asset. However, New York Attorney General Tish James indicated in a lawsuit against the KuCoin Cryptocurrency exchange that Ether is a security due to its ICO.
The SEC’s move could impact the Ethereum community, the entire altcoin market, and institutional investors looking to invest in Ether.
The SEC may face a lawsuit similar to the one from Grayscale Investments, which led to the approval of spot Bitcoin ETFs earlier this year. The final decision on the spot Ethereum ETF could be determined through a court battle, given the lack of clear crypto laws from Congress.
Market Overview
The price of Ethereum has seen a bullish trend, driven by increased adoption by institutional investors worldwide. Furthermore, Ether is the largest web3 ecosystem with over $52 billion in total value locked and more than $77 billion in the stablecoins market cap.
Consequently, Ethereum’s price is expected to mirror Bitcoin’s in the near term and retest its all-time high.
