SEC Postpones Approval of Ethereum ETF Implications for Investors

The approval process for the ETH ETF has taken an unexpected turn as the SEC has returned S-1 forms to the issuers. The spot Ethereum ETFs, which were expected to launch next week, have been further delayed as the SEC has provided comments on the submitted forms. The forms were sent back with a request for minor changes and the issuers have been asked to address the identified issues and resubmit the updated forms. This suggests that the final approval of spot Ethereum ETFs may be delayed and another round of filings will be required before they can begin trading. The SEC has set a deadline of July 8 for the issuers to submit the revised S-1 forms.

S-1 forms are an important part of the process that ETFs must go through before becoming operational. The first step towards the approval of spot Ethereum ETFs was the approval of the issuers’ 19b-4 forms in May, which was granted by the SEC according to the initial deadline. However, there is no specific deadline for the S-1 forms and the issuers are dependent on the SEC’s response time.

There were indications that spot ETH ETFs could start trading by July 4th, but this now seems unlikely. The SEC Chair had recently suggested that approval for spot Ethereum ETFs could come this summer, but did not provide a specific date, leaving issuers and investors uncertain. The minor changes requested by the SEC may indicate that there are no major issues, but the S-1 forms need to be modified to meet the expected compliance.

The Chair has confirmed that the approval process for spot Ethereum ETFs is progressing smoothly, with issuers such as BlackRock, Fidelity, 21Shares, Grayscale, Franklin Templeton, VanEck, iShares, and Invesco involved.

Market participants have criticized the SEC’s move, as Ethereum and the broader crypto market are already experiencing selling pressure. The price of ETH has fallen over 1% in the past 24 hours and its trading volume has also decreased by 8%, indicating a decline in interest among traders.