The U.S. Securities and Exchange Commission (SEC) is expected to deny applications for spot exchange-traded funds (ETFs) tied to the price of Ethereum, the second-largest cryptocurrency by market value. Financial firms in the U.S. are not optimistic about spot Ethereum ETF approval happening in May, as recent meetings with the SEC have been discouraging.

Several issuers, including VanEck and ARK Investment Management, have submitted filings to list spot Ethereum ETFs. The SEC is set to make decisions on these filings by May 23 and May 24. However, feedback from recent meetings with the SEC has not been promising. The lack of substantive discussions and engagement from agency staff has raised concerns among applicants.

The lack of engagement during these meetings has led many to believe that the SEC is likely to reject the filings. Unlike the detailed discussions that took place before the approval of spot Bitcoin ETFs earlier this year, the recent meetings have been described as one-sided. The sources suggest that the SEC did not articulate specific concerns or ask questions about the proposed products.

The rejection of spot Bitcoin ETFs in the past was due to concerns about market manipulation. However, after a court challenge by Grayscale Investments, the SEC was forced to approve them as they closely resembled previously approved Bitcoin futures ETFs.

As the SEC gears up to make decisions on spot Ethereum ETFs, the outcome remains uncertain. Stay tuned for updates on this developing story on Global Crypto News.

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