The US SEC is expected to declassify ether ETFs next month

The United States Securities and Exchange Commission (SEC) will ban Ether (ETH) exchange-traded funds (ETF) in May, according to a new report.

Reuters reported on April 24 that U.S. issuers and other companies expect the SEC to reject applications for Ether ETFs after meetings with the regulator in recent weeks, citing four people involved in the meetings.

The four people, who asked not to be named because of the private nature of the discussions, said recent meetings between the issuers and the SEC have been one-sided and agency staff have not discussed the actual details of the proposed products.

The sources disputed the failed talks regarding Ether ETFs to hold detailed talks between issuers and the agency in January, weeks before approving the space for Bitcoin ETFs.

Prior to the historic approval, the SEC had rejected spot BTC ETF filings for more than a decade. It changed its stance after Greyscale Investments won a court victory against the securities regulator in August 2023.

Many analysts agree that the SEC may further delay approval of the Ether ETF.

Ratification is likely to be delayed until 2024 or beyond, as the regulatory landscape is still very “cloudy,” according to Todd Rosenbluth, an analyst at VetaFi ETF.

Bloomberg ETF analyst Eric Balchunas previously estimated the chances of the SEC approving the May spot ether ETF in March at around 35%. He also suggested that the SEC had brought “good intel” to suggest that the silence may have been deliberate to funders.

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Balchunas mentioned that SEC Chairman Gary Gensler's position on Ether could influence the decision process, as Gensler refused to provide clarity on whether Ether is a security.

While it's clear the US is set for another delay, some international jurisdictions are moving forward with plans to trade ETF products.

On April 24, the Hong Kong Securities and Futures Commission (SFC) officially approved the first spot Bitcoin (BTC) and Ether ETFs, including three BTC and three ETFs by China Asset Management (ChinaAMC), Harvest Global Investments and Bocera.

Following the approval, Hong Kong crypto ETFs are expected to start trading on April 30.

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