VanEck Ethereum ETF Decision Delayed by US SEC Amid Ether Probe Reports

Crypto News– In recent times, the likelihood of the United States Securities and Exchange Commission (SEC) approving spot Ethereum (ETH) exchange-traded funds (ETFs) has significantly decreased ahead of the May 23 deadline.

VanEck Ethereum ETF Decision Delayed by US SEC Amid Ether Probe Reports

It appears the SEC aims to manage a scenario wherein institutional investors seek spot ETFs for other altcoins, notably Solana (SOL) and Ripple Labs-backed XRP. Additionally, there are reports indicating the SEC’s efforts to classify Ethereum as a security asset.

SEC Delays VanEck’s Spot Ether ETF Bid

On Wednesday, March 20, the US SEC issued a 45-page document detailing the delay in approving or disapproving the proposed rule change for listing and trading shares of the VanEck Ethereum ETF. Despite the impending deadline, the regulatory agency deemed it necessary to extend the review period.

The SEC’s decision came as no surprise, particularly following similar actions taken earlier in the week concerning Hashdex and ARK 21Shares’ spot Ethereum ETFs.

Of significant note, the SEC emphasized the absence of an Exchange-Traded Product (ETP) holding spot ETH, highlighting considerable risks for US investors. Furthermore, the agency hinted at potential differential treatment between Ether Futures ETFs and spot Ether ETPs.

Consequently, US-based investors may find themselves sidelined from the bullish momentum, while institutional investors in Europe and Canada enjoy access to spot Ether ETFs.

Is Ethereum Classified as a Security?

Recent reports suggest that the US SEC is investigating several companies in an effort to classify Ethereum as a security asset. Despite the well-known Hinman email indicating otherwise, which suggested that Ether is not a security, the SEC may be scrutinizing Ethereum’s ICO.

However, in a lawsuit against KuCoin Cryptocurrency exchange, New York Attorney General Tish James suggested that Ether is indeed a security due to its ICO.

This move by the SEC could have significant implications for the Ethereum community, the broader altcoin market, and institutional investors eyeing Ether.

Nevertheless, it’s possible that the SEC could face legal challenges similar to the lawsuit against Grayscale Investments, which ultimately led to the approval of spot Bitcoin ETFs earlier this year. The fate of the spot Ethereum ETF may ultimately be determined through legal battles, particularly given the lack of clear crypto regulations from Congress.