Grayscale sees Ether ETF approvals despite SEC ‘lack of involvement’

The grayscale spot Ether (ETH) convertible is certain to be approved in May, despite recent “chat” about the US securities regulator's “lack of communication” with applicants.

“I don't think the lack of involvement from regulators is indicative of one outcome or another. […] I personally am not discouraged by this and believe that EFAs should be approved,” Grayscale Chief Legal Officer Craig Salm explained in a March 25 post on X.

In the months leading up to the approval of the Salm Bitcoin ETF, many issues common to defining an Ether ETF were “discovered” – such as details of creation and redemption procedures, cash and in-kind models, asset protection, loss prevention, and protection.

“So in many ways, the SEC has already done that, and issuers have little to do at this point,” he said.

“The case for #Bitcoin ETFs is just as strong.”

However, ETF issuers who want to incorporate stocks into their positions have the added problem of having an Ether ETF “clog” with the regulator. Those applicants include Arch21Shares, Fidelity and Franklin Templeton.

Bloomberg EFF analysts Eric Balchunas and James Seifert recently shared concerns about a “lack of involvement” from the SEC, and have since cut their odds of Ether to an approved spot in May to 25%.

In a March 25 post on X, Balchunas said it's “an embarrassing 25%,” adding that the lack of participation appears to be “purposeful” as opposed to “delayed.”

Related: Pundits worry SEC's Ethereum probe could be used to hold ETFs

However, Salm said the recent approval of the Ether Futures ETF and the adoption of those products as commodity futures puts the Ether ETF in a strong position as futures and spot products are “highly correlated.”

A similar conclusion was reached by Coinbase Chief Legal Officer Paul Grewal and Brian Quintenz, who were commissioners of the Commodity Futures Trading Commission last week.

BlackRock, VanEyck, ARK 21Shares, Fidelity, Invesco Galaxy, Grayscale, Franklin Templeton and Hashdex are among the Ether ETF applicants vying for SEC approval.

The SEC must rule on VanEck's application by May 23, and analysts predict that all applicants will learn their fate by that date.

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