SEC opens comment period for Ethereum spot ETF proposal

The U.S. Securities and Exchange Commission (SEC) has launched a three-week comment period on three Ethereum (ETH) spot exchange-traded fund (ETF) proposals submitted by Grayscale Investments, Fidelity and Bitwise.

The agency issued a notice on Tuesday inviting interested parties to provide comments on the proposed rule changes.

Despite the recent approval of a Bitcoin (BTC) spot ETF in January, industry analysts have become less optimistic about the SEC’s willingness to approve a similar product tracking Ethereum. The agency decided to approve a Bitcoin ETF after facing pressure after filing a lawsuit against Grayscale and suffering significant losses. However, SEC officials believe that Bitcoin’s approval does not necessarily apply to other cryptocurrencies.

SEC Chairman Gary Gensler stressed in January that Bitcoin’s approval should not be interpreted as a reflection of the commission’s position on the status of other crypto-assets under federal securities laws. This stance caused concern among investors and industry participants.

The launch of a Bitcoin ETF has given a huge boost to investment in the currency, and some expect a similar outcome for ETH if the SEC approves an Ethereum spot ETF. However, there are reports that the SEC has been investigating whether ETH should be classified as a security, which would place it under a different legal framework than Bitcoin.

SEC doesn’t like ETFs

The outcome of the three-week comment period and the SEC’s ongoing investigation into ETH’s classification could have significant implications for the future of the Ethereum spot ETF and the broader cryptocurrency market. Previously, the U.S. Securities and Exchange Commission (SEC) held discussions on the Ethereum spot ETF proposed by asset management company Grayscale Investments and Coinbase in March.

According to documents about the meeting, the cryptocurrency exchange described Grayscale’s proposed product to regulators back in October. If accepted, the proposal would convert the Grayscale Ethereum Trust closed-end fund into a spot ETF.

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