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Crypto News Today- Spot Ethereum ETFs Under Threat: SEC Filing Raises Security Concerns

sevval15/05/20241 Mins read352

Crypto News Today- Spot Ethereum Etfs Under Threat: Sec Filing Raises Security Concerns

Spot Ethereum ETFs Face Risk Due to Security Concerns Identified in SEC Filing

Crypto News– A recent SEC filing has raised concerns about the future of spot Ethereum ETFs, potentially unsettling the crypto industry.

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On May 13, Scott Johnsson from Davis Polk and Wardwell pointed out that the SEC is seeking public input on whether to classify BlackRock’s proposed spot Ethereum ETF as a commodity-based trust.

SEC Evaluates Ethereum ETFs

Johnsson suggested that denying the ETFs could be a strategic move by the SEC, as they might be misfiled as commodity-based trust shares. Meanwhile, a recent filing by BlackRock hinted that the SEC might consider classifying ETH as a security. Such a classification could prevent the approval of spot Ethereum ETFs.

Eric Balchunas, a Bloomberg ETF analyst, commented that despite the legal jargon, the filing indicates a low chance of SEC approval for a spot Ethereum ETF. Balchunas highlighted the importance of the classification issue, stating, The likelihood remains very low—slim to none.

ETF Approvals: Rising Anticipation and Mounting Concerns

The SEC’s upcoming decision on the VanEck spot Ether ETF, due by May 23, is critical and could set a precedent for other firms like ARK 21Shares and Hashdex. The recent withdrawal of Grayscale’s ETF application has added to the market’s uncertainty. VanEck’s CEO, Jan van Eck, has expressed concerns about the regulatory challenges they face.

Amid these developments, SEC Chair Gary Gensler’s previous comments that ETH is not a security are being revisited. The SEC is now scrutinizing the altcoin’s status more closely. Gensler’s upcoming speech at the Investment Company Institute summit in Washington, D.C., might provide further clarity on the matter.

Johnsson emphasized that under 15 U.S.C. 78s(b)(2)(B), the SEC is required to explain any potential rejections. The frequent issues with Ethereum ETF filings not being correctly classified as commodities suggest a shift in regulatory focus.

FAQs

Why are spot Ethereum ETFs under threat?

Spot Ethereum ETFs are under threat due to a recent SEC filing that has raised security concerns, potentially impacting their approval.

What specific concerns has the SEC raised about Ethereum ETFs?

The SEC has raised concerns about the classification of Ethereum ETFs, specifically whether they should be classified as commodity-based trust shares or securities.

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spot Ethereum ETFs

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sevval

Şevval has been actively writing since 2022 and is a third-year mathematics student at Ankara University. Her interest in writing is shaped particularly around innovative technologies such as Web3, artificial intelligence, and blockchain. She closely follows developments in these fields and aims to convey complex topics to readers in a clear and engaging manner. She enjoys combining her mathematical knowledge with technology to create content and strives to raise awareness about the digital world of the future.