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PARIS — Issuers of spot bitcoin exchange-traded funds on Tuesday say the U.S. Securities and Exchange Commission is unlikely to approve such a product for the cryptocurrency ether.
The regulator has a late May deadline to conclude its review on an ether ETF. That comes after the SEC in March delayed its original deadline for a choice on the ether ETF application.
Corporations starting from BlackRock to Fidelity and VanEck, which issued spot bitcoin ETFs this yr, have been waiting for approval of an ether product.
Some issuers aren’t confident the SEC will greenlight the ether applications.
“We were the primary to file as well for ethereum within the U.S., and we and [Ark Invest CEO] Cathy Wood, are sort of the primary in line for May, I suppose, to probably be rejected,” VanEck CEO Jan van Eck told CNBC’s Arjun Kharpal on the Paris Blockchain Week crypto event in France.
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Ark Invest was not immediately available for comment when contacted by CNBC.
“The way in which the legal process goes is the regulators offers you comments in your application, and that happened for weeks and weeks before the bitcoin ETFs — and at once, pins are dropping so far as ethereum is anxious,” van Eck added.
Enthusiasm has been mounting among the many crypto community for an ether ETF, ever because the SEC approved the primary spot bitcoin ETFs in January.
The ether price has been climbing this past week on the back of hopes that the SEC will approve an ether-backed ETF.
The token is up about 10% within the last seven days, based on CoinGecko data.
Nevertheless, the U.S. regulator has signaled that it may not be so willing to approve such an investment product.
SEC Chair Gary Gensler has previously stressed that “the overwhelming majority of crypto assets are investment contracts and thus subject to the federal securities laws,” within the agency’s view.
This complicates matters for an ether ETF.
“We’re observing the ethereum decision very, very closely,” CoinShares CEO Jean-Marie Mognetti told CNBC on Tuesday. “CoinShares was not within the race for the bitcoin ETF until three months before the approval, and we managed to qualify ourselves on the last minute.”
He was equally pessimistic over the chances of gaining such an approval within the short term.
CoinShares isn’t considered one of the businesses within the running for an ether ETF within the U.S.
“I do not see anything being approved this side of the yr,” he noted, suggesting it could be difficult to achieve SEC approval for proof of stake — a protocol specific to blockchain.
Bitcoin is underpinned by a special protocol, often known as proof of labor, where volunteer miners validate transactions and mint recent tokens.
The SEC has not taken issue with proof of labor from a securities law standpoint.