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SEC Reviews ProShares’ Spot Ethereum ETF Proposal

SEC reviews ProShares' spot Ethereum ETF application amid recent approvals, with public comments open for 21 days and a decision expected by late July 2024.

The US Securities and Exchange Commission (SEC) is now reviewing an application for a spot Ether (ETH) exchange-traded fund (ETF) from asset manager ProShares, following recent approvals of several similar investment vehicles.

In a June 10 filing, the SEC announced that NYSE Arca proposed a rule change to list and trade shares of the ProShares Ethereum ETF. The public has 21 days to comment on the application, and the SEC has 45 days to approve, disapprove, or extend the timeline for its decision, which could potentially be by late July 2024.

Earlier, on May 23, the SEC approved 19b-4 filings from eight asset management firms to list and trade spot Ether ETFs on US exchanges for the first time. However, final approval requires the SEC to sign off on S-1 registration statements before these ETFs can officially begin trading—a process expected to conclude sometime in July.

Bloomberg Intelligence ETF analyst James Seyffart commented on ProShares’ entry into the spot Ether ETF market, suggesting that while the ETF might not launch simultaneously with others, its late entry is intriguing.

ProShares, known for its pioneering efforts in the ETF space, received approval from the SEC in October 2023 to list and trade shares of a spot investment vehicle tied to ETH futures. The firm also offers a Bitcoin Strategy ETF on NYSE Arca under the ticker BITO.

Meanwhile, the SEC also approved Ark Invest’s exit from a joint ETF application with 21Shares, allowing 21Shares to proceed independently. This decision, made effective immediately by waiving the usual 30-day delay, does not significantly impact investor protection or competition. As a result, the spot Ethereum ETF initially named ARK 21Shares Ethereum ETF has been renamed 21Shares Core Ethereum ETF.

Despite these advancements, potential spot Ethereum ETF issuers are still awaiting SEC feedback on their S-1 filings submitted on May 31. Issuers initially expected feedback by June 7, but the SEC’s comments are still pending. SEC Chair Gary Gensler remarked in a CNBC interview that the approval process for S-1 forms would “take some time.”

The approval process for these ETFs involves two steps: the 19b-4 filing and the S-1 filing. Currently, the S-1 forms are under review, and Bloomberg Intelligence ETF analyst Eric Balchunas previously noted that another round of fine-tuning comments from the SEC staff would likely precede the final approval.

ProShares’ spot Ethereum ETF application is part of a broader movement as the SEC continues to evaluate the increasing number of spot Ether ETFs. The outcome of these reviews will significantly impact the future of crypto investment products in the US market.


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