The Grayscale executive elaborated that crucial aspects regarding creation and redemption procedures, cash and in-kind models, asset protection, loss prevention, and custody were addressed in the spot Bitcoin ETF applications.
Grayscale Optimistic About Approval of Spot Ether (ETH) Exchange-Traded Funds Despite Regulatory Speculations
Despite recent discussions about the U.S. securities regulator’s apparent lack of involvement with applicants, Grayscale remains confident that spot Ether exchange-traded funds (ETFs) will receive approval in May.
Chief Legal Officer Craig Salm expressed his confidence in a recent post on March 25, stating, “I don’t believe the perceived lack of regulator engagement should determine the outcome. I remain undeterred and anticipate the approval of the ETFs.”
Salm highlighted that preceding the approval of spot Bitcoin ETFs, many of the challenges associated with spot Ether ETFs had been addressed, including details regarding creation and redemption procedures, cash and in-kind models, asset protection, loss prevention, and custody.
“So in many ways, the SEC already has engaged and issuers simply have less to engage on this time,” he said, adding:
“The case is just as strong as it was for spot #Bitcoin ETFs.”
ETF Issuers Encounter Hurdles Incorporating Staking into Spot Ether ETFs
ETF issuers aiming to integrate staking into their spot Ether ETFs face additional challenges with regulators. Notable applicants such as Ark 21Shares, Fidelity, and Franklin Templeton are among those involved in resolving these issues.
Bloomberg ETF analysts Eric Balchunas and James Seyffart have expressed concern over the SEC’s perceived lack of involvement, leading them to lower the odds of an approved spot Ether ETF in May to 25%. Balchunas described this estimate as “pessimistic,” suggesting the regulator’s disengagement appears deliberate rather than simply delayed.
Related: Analysts Express Concerns That SEC’s Ethereum Investigation Might Delay ETFs
However, Salm said the recent approval of Ether Futures ETFs and regulation of those products as commodity futures put the spot Ether ETFs in a strong position to be approved as futures and spot products have a “high correlation.”
A similar conclusion was reached by Coinbase chief legal officer Paul Grewal and Brian Quintenz, a former commissioner of the Commodity Futures Trading Commission last week.
BlackRock, VanEck, ARK 21Shares, Fidelity, Invesco Galaxy, Grayscale, Franklin Templeton, and Hashdex are among the spot Ether ETF applicants vying for SEC approval.
The SEC must decide on VanEck’s application by May 23 and analysts predict all applicants will learn their fate on that date.
