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PARIS — The U.S. Securities and Exchange Commission is unlikely to approve such a product for the cryptocurrency, issuers of bitcoin exchange-traded funds said on Tuesday. ether.
The regulator has a deadline of late May to conclude its review of ether ETFs. This comes after the SEC in March postponed the original deadline for a decision on an Ethereum ETF application.
Companies range from Black stone Fidelity and VanEck, which issued bitcoin ETFs this year, are awaiting approval for an ether product.
Some issuers are not confident that the SEC will give the green light to ether applications.
“We were also the first to apply for Ethereum in the US, and we and (Ark Invest CEO) Cathie Wood, are among the first in line for May and, I think, will probably be rejected,” said Jan van Eck, president. VanEck CEO Arjun Kharpal of CNBC said at the Paris Blockchain Week crypto event in Paris, France.
Ark Invest was not immediately available for comment when contacted by CNBC.
“The way the legal process works is that regulators will give you feedback on your application, and that happened weeks and weeks before Bitcoin ETFs — and at the moment, the pins are down regarding Ethereum,” Van Eck added.
Enthusiasm has been growing among the cryptocurrency community for ether ETFs, ever since the Securities and Exchange Commission approved the first bitcoin ETFs in January. But the SEC has indicated that it may not be willing to approve such an investment product.
SEC Chairman Gary Gensler has previously asserted that “the vast majority of crypto assets are investment contracts and therefore subject to the federal securities laws,” in the SEC’s view.
This complicates matters for Ether ETFs.
“We are closely monitoring the Ethereum decision,” CoinShares CEO Jean-Marie Mugnitti told CNBC on Tuesday. “CoinShares was only in the running for the Bitcoin ETF three months before approval, and we were able to onboard ourselves at the last minute.”
He was equally pessimistic about the prospects for such approval in the short term.
CoinShares is not one of the companies competing for the ETF in the US
“I don't see anything being approved this side of the year,” he noted, noting that it may be difficult to get SEC approval for proof of stake — a blockchain protocol.
Bitcoin is backed by a different protocol, known as proof-of-work, where volunteer miners validate transactions and issue new tokens.
The SEC has not approached proof of work from a securities law standpoint.
