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Two well-known cryptocurrency asset managers, namely Grayscale and Bitwise, have suspended their ETH futures exchange-traded fund (ETF) plans amid growing scrutiny from US regulators.
On May 17, Grayscale filed an amendment to its filing with the Securities and Exchange Commission to remove references to Ethereum futures ETFs. The amendment comes into effect just one week after the exchange of plans to launch three ETF products. The other two flagship products include the semi-spot bitcoin ETF, which will invest in the BTC spot market, and the privacy ETF, which focuses on investments in blockchain companies and privacy-focused digital assets.
Grayscale just filed for a semi-spot bitcoin ETF, as well as Ethereum Futures ETF and a Privacy ETF. Interesting.. pic.twitter.com/MPruDolp7G
— Eric Balchunas (@EricBalchunas) May 9, 2023
Grayscale’s amendment to its ETF filing comes just days after the SEC asked the asset manager to withdraw its Filecoin Trust filing. The regulator has warned that its underlying asset, Filecoin, qualifies as a security.
SEC tells Grayscale to withdraw the ether futures ETF filing, watch for the rest to follow suit, deja vu all over again. Scoop via@VildanaHajricpic.twitter.com/NUXy4pFfJi
— Eric Balchunas (@EricBalchunas) May 17, 2023
Grayscale responded to the SEC’s allegation on May 17 by stating that the underlying asset does not qualify as a security. The firm “intends to respond promptly to SEC officials explaining the legal basis for Grayscale’s position.”
On the other hand, Bitwise has withdrawn its application to launch an Ether-based futures ETF. In its amendment, filed May 17 with the SEC, the crypto asset manager stated that they no longer “intend to pursue the effectiveness of the fund, and no securities of the fund have been or will be sold in accordance with the aforementioned announcement. effective amendment to the application for registration of a trust”.
Related: GBTC approval could return ‘a couple of billion dollars’ to investors: Grayscale CEO
Bitwise did not respond to Cointelegraph’s request for comment on the matter at time of publication.
A Bitcoin-based futures ETF debuted in the last quarter of 2021, leading many in the crypto industry to believe that a spot crypto ETF is on the way. However, almost two years later and a string of cryptocurrency kills during the 2022 bear market, regulators have become more skeptical of such products.