Grayscale files Ethereum futures ETF application with SEC

Leading crypto asset manager Greyscale has abandoned plans to offer an exchange-traded fund (ETF) for Ethereum futures, dropping a regulatory change application to the Securities and Exchange Commission (SEC) on Tuesday.

The exit notice for the proposed Greyscale Ethereum Futures Trust ETF does not explain why Greyscale changed its plan, only recounting several delays requested by the SEC since its initial filing on September 19, 2023. The federal regulator has announced that it needs more time to do so. Review the proposal on November 15, December 18 and finally on March 22 this year.

Bloomberg ETF analyst James Seifert says it's an interesting move.

“This in my view was a Trojan horse file to create the same conditions that allowed Grayscale to win GBTC. A snack,” he said.

A federal appeals court previously sided with Grayscale in August after the agency called on Bitcoin futures ETFs — traditional investors to buy stocks that track the expected value of the digital asset — while denying Bitcoin a place in ETFs tied to the current price of BTC.

Seyffart Grayscale said he intends to host another legal showdown, thinking the SEC will again seek to “enforce the future, ban the space.”

“This is a good sign they won't press charges this time,” he tweeted.

Grayscale may have released its Ethereum Futures ETF application for an updated resubmission, Seyffart acknowledged.

“Exiting and refiling is less work for the SEC, but at the same time it means there's no way for Grayscale or anyone else to sue now,” he said.

Twitter commenter Greyscale mocked Seifert because the SEC was about to approve the Ethereum spot ETF, which pulled the application.

“I don't think that will happen (although the odds are not zero), so I think it's something else,” he wrote. “That said, to be honest, it's one of the very few reasons I'd willingly pull this off if I were Greyscale.

Indeed, the move comes amid growing doubt that the SEC will allow the creation of Ethereum spot ETFs, a once-promising prospect after the agency approved the sale of Bitcoin spot ETFs in January. The launch of Bitcoin spot ETFs has set the stage for a bull run for the top cryptocurrency, helping it set a new all-time high in March.

The odds of approval of an Ethereum spot ETF continue to fall, but hopes have dimmed recently, following allegations that the SEC classified Ethereum as a regulated security last year, despite public statements that no decision had been made.

Edited by Ryan Ozawa.