The United States Securities and Exchange Commission (SEC) has delayed its decision regarding the approval of options trading for spot Ethereum ETFs.

SEC Extends Review Period for Ethereum ETFs

In two separate filings, the SEC announced it requires “sufficient time to consider the proposed rule change” that would permit Nasdaq ISE LLC and NYSE American LLC to offer options trading for spot Ethereum ETFs.

Funds Awaiting Approval

Currently, the funds seeking approval are BlackRock’s iShares Ethereum Trust (ETHA), Bitwise’s Ethereum ETF (ETHW), Grayscale’s Ethereum Trust (ETHE), and Ethereum Mini Trust (ETH). BlackRock initially filed for the rule change for its ETHA product in August 2024, followed by Bitwise and Grayscale via NYSE American LLC during the same month.

Extended Review Timeline

While a final decision was expected by September 26 and 27, 2024, the SEC has extended the review period to November 10 and 11, 2024. This extension is in line with Section 19(b)(2) of the Securities Exchange Act, which allows the regulator more time to consider such decisions and aligns with its cautious approach towards crypto-related Exchange-Traded Products (ETPs).

Recent SEC Approvals and Filings

On September 20, the SEC approved options on BlackRock’s iShares Bitcoin Trust, allowing Nasdaq to list IBIT options under its continued listing standards. This approval followed an almost eight-month review period.

“The SEC’s thorough review process ensures all regulatory concerns over market manipulation and other risks are addressed before approval.”

Nasdaq had to refile multiple amendments throughout this process, starting from January 11, 2024, to provide additional information regarding Bitcoin-based ETPs.

Current Market Trends

The SEC’s extension comes amid declining interest in spot Ethereum ETFs, with the nine funds experiencing seven consecutive weeks of outflows, totaling over $620 million. In contrast, spot Bitcoin ETFs have recorded over $17 billion in inflows since their launch.

BlackRock’s Recent Amendments

In other news, BlackRock recently filed an amendment requiring its custodian, Coinbase, to process Bitcoin ETF withdrawals within 12 hours. This change aims to address rising concerns among investors about Coinbase’s transparency in handling Bitcoin assets. The quicker withdrawal process is intended to reassure investors that their holdings are being appropriately managed.

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