SEC delays Invesco Galaxy spot ETH ETF, but May decisions are still expected

The U.S. Securities and Alternate Fee (SEC) prolonged the choice interval for Invesco and Galaxy’s spot Ethereum ETF on Feb. 6.

The company’s announcement particularly issues a proposed rule change from Cboe BZX that might enable it to checklist and commerce shares of the fund.

The SEC mentioned that the proposed rule change was revealed for remark within the Federal Register on Nov. 8, 2023. The company then designated an extended interval for approval on Dec. 13, 2023, extending the interval throughout which it may approve, disapprove, or institute proceedings round approval or disapproval.

The company’s newest submitting signifies that it has chosen the final choice, thereby instituting proceedings for round approval or disapproval. The proceedings request that commenters handle fraud prevention, market manipulation, and investor protections. These points are at play for all different pending Ethereum ETF proposals and had been additionally key to the approval of spot Bitcoin ETFs in January.

The SEC didn’t present actual deadlines at the moment. It mentioned that feedback ought to be submitted inside 21 days of publication within the Federal Register, and that rebuttal feedback ought to be submitted inside 35 days of publication in the identical.

SEC anticipated to resolve on ETH ETFs by Might

The extension doesn’t have an effect on broader approval timelines for ETH ETFs. Bloomberg ETF analyst James Seyffart acknowledged the delay, writing:

“[The] SEC simply delayed [Invesco and Galaxy’s] Ethereum ETF. [This was] 100% anticipated and extra delays will proceed to occur in coming months. The one date that issues for spot Ethereum ETFs right now is Might twenty third. Which is VanEck’s remaining deadline date.”

It’s doubtless that the SEC will resolve on a number of related proposals on the identical time, together with those who have later deadlines than VanEck’s proposal.

The SEC has delayed numerous different spot Ethereum ETFs in previous weeks. The company prolonged the choice interval on functions from Constancy on Jan. 18, BlackRock on Jan. 24, and Grayscale on Jan. 25. As soon as once more, these delays don’t have an effect on the broader Might determination deadline described by Seyffart.

It’s unclear whether or not the SEC will select to approve a spot Ethereum ETF. One Polymarket prediction market at present suggests 43% odds of approval by Might. Seyffart has instructed a 60% likelihood of approval by Might, whereas one JP Morgan member has instructed a 50% likelihood of approval. A TD Cowen analysis group believes {that a} spot Ethereum ETF won’t be authorized in Might.