January 20, 2024

SEC Postpones Decision on Fidelity's Proposed Ethereum Spot ETF to March Deadline

SEC Extends Deadline for Decision on Fidelity's Ethereum (ETH) Spot ETF by 45 Days.

The Securities and Exchange Commission (SEC) has opted to extend the deadline for reaching a decision on Fidelity's proposal for an exchange-traded fund (ETF) focused on spot ether until March 5, as outlined in a filing.

In the filing, the SEC stated:

"The Commission finds it appropriate to designate a longer period within which to take action on the proposed rule change so that it has sufficient time to consider the proposed rule change and the issues raised therein."

Fidelity initially submitted its application for the Fidelity Ethereum Fund in November, referencing a court ruling from the previous year. In that ruling, judges highlighted the SEC's failure to provide a clear rationale for rejecting spot crypto ETFs while permitting futures-based products.

This extension grants the SEC additional time to assess whether to approve, disapprove, or initiate proceedings regarding Fidelity's proposal.

Commenting on the delay, Bloomberg Intelligence ETF analyst James Seyffart noted:

This month, the SEC granted authorization for 11 spot bitcoin ETFs to commence trading, prompting speculation within the industry about the potential approval of a spot ether ETF.

Fidelity, joining industry giant BlackRock in the pursuit of a spot ether ETF, entered the race late last year. A month before these firms applied for spot products, ether futures ETFs were introduced.

Stuart Barton, co-founder at Volatility Shares, remarked last week:

"The fact that they allowed listing of the futures-based ETFs is enough to say they are thinking about ether the same way they are thinking about bitcoin, and you can infer from that they're probably thinking it's not a security and not going to regulate it that way."
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