As a researcher with a background in finance and experience following the regulatory developments in the cryptocurrency space, I find Eric Balchunas’ predictions regarding the Ethereum ETF launch intriguing. The recent SEC-mandated S-1 amendments seem to be the final hurdle before the actual launch, but the minimal changes in the latest filings suggest that more updates are on the way.
According to Bloomberg ETF analyst Eric Balchunas, he estimates that July 18 is the most likely date for the debut of a spot Ethereum exchange-traded fund (ETF).
After the Securities Exchange Commission (SEC) made changes to the form S-1, companies were obligated to update their registration statements and reapply.
Balchunas Notes Minimal Changes in Latest Filing
In the recent set of amendment submissions for Ethereum spot ETF proposals by asset managers, Eric Balchunas characterized the modifications as insignificant. He pointed out that the early filings contained no noteworthy changes.
The SEC requested the S-1 filings on July 8th, although they hadn’t indicated that the fee was due yet. They will provide guidance and a plan to issuers shortly, following which the documents will be returned with all necessary information filled in, including fees, and the process can begin in earnest.
— Eric Balchunas (@EricBalchunas) July 8, 2024
In simpler terms, the latest modifications to S-1 and S-3 forms concern the power of asset managers to create Exchange-Traded Funds (ETFs). This is distinct from the 19b-4 filings that allow exchanges to list and initiate trading for these funds once they’re introduced.
On Monday, VanEck led the way with an amended registration filing for its Ethereum spot ETF, renaming it The VanEck Ethereum Trust. Shortly after, 21Shares made a similar move by submitting new registration documents for its own Ethereum spot ETFs.
Two recent filings from Grayscale marked its entry into a popular trend: one for modifying the $28 billion Grayscale Ethereum Trust, and another for creating a less expensive “mini” version of this trust. Similar actions were taken by Franklin Templeton, Fidelity, and BlackRock, as they also filed amended registration statements for their respective Ethereum ETFs.
Despite the recent modifications, the filings submitted on Monday did not reveal the anticipated fees for the ETFs. According to Balchunas, the SEC has not yet required this disclosure, implying that a final round of adjustments, encompassing fee information, will follow before the launch. Once this step is complete, “it’s full speed ahead.”
Companies Update ETH ETF Filings
The latest adjustments resulted in some subtle modifications. In VanEck’s filing, there is now the absence of certain regulatory phrases concerning safekeeping. Specifically, a passage detailing the process of handling Ethereum withdrawals via the selected custodian has been eliminated.
As an analyst, I’ve noticed that recent adjustments made to the regulations align with Bitwise’s changes from last week. These modifications reflect the Securities and Exchange Commission (SEC)’s stance on ensuring compliance within the crypto market. My analysis underscores SEC Chair Gary Gensler’s concern regarding insufficient investor protection when using cryptocurrency exchanges, while also emphasizing potential repercussions for securities laws.
In their revised filing with the SEC, 21Shares disclosed information about the regulatory initiatives and minor adjustments.
In their revised application for the “mini” Ethereum Exchange-Traded Fund (ETF) from Grayscale, they’ve added a clear explanation that no Ethereum held within the product will be staked. Staking refers to the practice where Ethereum tokens are transferred to support the network and earn rewards in return.
Significantly, among the applications submitted to the SEC, none have disclosed intentions for Ethereum staking. Some applicants have even omitted related language from their proposals prior to submission.
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2024-07-09 22:53