Gary

BlackRock

Analysts have unearthed details from a March filing with the United States Securities and Exchange Commission (SEC) that suggest the regulator may consider labeling Ether (<a href="https://cointelegraph.com/ethereum-price" rel="noopener noreferrer nofollow">ETH</a>) a security.
In a May 13 X post, Davis Polk and Wardwell Associate Scott Johnsson <a href="https://twitter.com/SGJohnsson/status/1790219759142744195" target="_blank" rel="noopener noreferrer nofollow">reviewed</a> a March 4 filing from BlackRock over its application to list and trade a spot Ether exchange-traded fund on the Nasdaq. The filing <a href="https://cointelegraph.com/news/sec-delays-ethereum-etf-applications-blackrock-fidelity" rel="noopener noreferrer nofollow">delayed the deadline</a> for the commission to decide on a spot Ether ETF from BlackRock until June but also called for public feedback on whether the investment vehicle could be filed as a commodity.
“The obvious purpose is to potentially deny on the basis that these spot filings are improperly filed as commodity-based trust shares and do not qualify if they are holding a security,” <a href="https://twitter.com/SGJohnsson/status/1790219763211198510" target="_blank" rel="noopener noreferrer nofollow">said</a> Johnsson.
<figure><img src="https://s3.cointelegraph.com/uploads/2024-05/8fb60c6c-8c13-4683-8ae8-4f21eb1a487b.png">
 <figcaption style="text-align: center;">Source: <a href="https://www.sec.gov/files/rules/sro/nasdaq/2024/34-99665.pdf" target="_blank" rel="noopener noreferrer nofollow">SEC</a>
 </figcaption>
</figure>
According to Bloomberg ETF analyst Eric Balchunas, the SEC filing <a href="https://twitter.com/EricBalchunas/status/1790384182717190481" target="_blank" rel="noopener noreferrer nofollow">was</a> “buried 50 feet deep in a pile of legalese,” but this did not change his speculation the regulator’s odds of signing off on a spot Ether ETF were “slim to none.” The SEC must decide whether to approve or deny VanEck’s spot Ether ETF by May 23 — the first in several applications waiting in the pipeline.
Related: <a href="https://cointelegraph.com/news/short-traders-stack-on-ether-grayscale-withdraws-futures-etf" rel="noopener noreferrer nofollow">Traders rush to short Ether as Grayscale pulls its futures ETF plan</a>
Should the SEC deny VanEck’s application, the commission could turn down spot Ether ETFs from ARK 21Shares, Hashdex, Invesco Galaxy, BlackRock and Fidelity. Grayscale <a href="https://cointelegraph.com/news/grayscale-withdraws-ethereum-futures-etf-application" rel="noopener noreferrer nofollow">withdrew its spot Ether ETF application</a> on May 7 without explanation. VanEck CEO Jan van Eck reportedly <a href="https://cointelegraph.com/news/ethereum-spot-etf-probably-rejected-van-eck-ceo" rel="noopener noreferrer nofollow">doubted that the SEC</a> would approve his company’s offering in May.
Central to the SEC’s decision is whether the commission considers ETH a security or commodity. Despite many previous public statements from Chair Gary Gensler declaring ETH was not a security, reports suggest that the commission has <a href="https://cointelegraph.com/news/why-sec-could-be-investigating-ethereum-security" rel="noopener noreferrer nofollow">launched a probe</a> into Ether. Gensler will speak at the Investment Company Institute summit in Washington, D.C., on May 23.
Magazine: <a href="https://cointelegraph.com/magazine/sec-ripple-case-nears-conclusion-grayscale-withdraws-etf-filing-hodlers-digest-may-5-11/" rel="noopener noreferrer nofollow">SEC, Ripple case nears conclusion, Grayscale withdraws ETF filing, and more: Hodler’s Digest, May 5-11</a>

Filing suggests SEC is exploring grounds to deny spot Ether ETFs

Cointelegraph

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