ARK and 21Shares drop share plans from Ethereum ETF proposal

ARK Invest and 21Shares have removed stock plans from their updated positions on ether exchange-traded fund proposals.

In the revised filing filed on Friday, May 10, 21Shares removed the clause stating that part of the fund's assets will be shared with third-party providers. Previously, “the sponsor may from time to time acquire trust assets through one or more trust staking providers.

In their Feb. 7 filing, the companies included a clause stating that 21 shillings would receive ETH for stock awards and intend to classify the proceeds as income earned by the fund.

However, the latest filing removes the relevant section, but makes broader comments, including the possible effects of penalty losses, temporarily unavailable funds during connection and binding, and the price of Ether (ETH).

According to Bloomberg ETF analyst Eric Balchunas, the update may be an effort to refine the application in response to a possible response from the US Securities and Exchange Commission (SEC), although there are no official comments.

Alternatively, Balchunas suggests the change could be a last-ditch attempt or a strategic move to deny information available to the SEC.

In September 2023, ARK Invest and 21Shares filed an application for the SpotEther ETF. The currency aims for direct exposure to Ether and will trade on the Cboe BZX exchange if permitted. The exchange uses the CME CF Ether-Dollar Reference Rate – New York variant.

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Sponsor 21Shares, a Delaware trust company, is the trustee, and Coinbase Custody Trust Company holds the Ether assets, while ARK Investment Management serves as sub-advisor in marketing the shares.

The SEC has been delaying decisions on SPO. The agency has delayed making a decision on the Invesco Galaxy spot Ethereum ETF proposal and has also pushed back deadlines for other proposals from Greyscale, Franklin Templeton, VanEyck and BlackRock.

The regulator is expected to rule on VanEck's spot Ethereum application on May 23, followed by Arch and 21Shares' application on May 24.

The SEC approved the listing and trading of Bitcoin ETFs on US exchanges in January. However, spot Ethereum ETF approval has been declining in recent months, with Bloomberg ETF analyst Eric Balchunas lowering his estimate of Ethereum ETF approval from 70% to 25% at the end of May.

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