The filing suggests that the SEC is investigating reasons to separate Ether ETFs
Analysts have uncovered details from a March filing with the United States Securities and Exchange Commission (SEC) that suggest the regulator may consider designating Ether (ETH) as a security.
In a May 13 X post, Davis Polk and Wardwell Associate Scott Johnson reviewed a March 4 filing from BlackRock on its application to list and trade the ether exchange on Nasdaq. The filing delayed the deadline until June for the commission to decide on a place for the Ether ETF from BlackRock, but asked for public comment on whether the investment vehicle could be registered as a commodity.
“The clear intent is to disqualify these placements because they improperly subscribed to a commodity-based trust stock and did not qualify if they held securities,” Johnson said.
According to Bloomberg ETF analyst Eric Balchunas, the SEC filing was “buried 50 feet deep in the legal pile,” but that didn't change his estimate that the chances of the regulator signing off on the Ether ETF at one point were “slim of none.” The SEC has until May 23 to decide whether to approve VanEck's spot Ether ETF — the first of several applications.
Related: Traders rush to short Ether as Grayscale pulls futures ETF plan
If the SEC rejects VanEck's application, the commission could reject Ether ETFs from ARK 21Shares, Hashdex, Invesco Galaxy, BlackRock and Fidelity. Grayscale withdrew its spot Ether ETF application on May 7 without explanation. VanEck CEO Jan Van Eck was skeptical that the SEC would approve his company's offering in May.
The key to the SEC's decision is whether the commission will consider ETH a security or a commodity. Despite Chairman Gary Gensler's earlier declaration that ETH is not secure, reports indicate that the Commission has launched an investigation into Ether. Gensler will speak at the Investment Company Institute meeting in Washington, DC on May 23.
Magazine: SEC, Ripple Case Closes to Conclusion, Grayscale Excludes ETF File, and More: Hodler's Digest, May 5-11
