Two prominent crypto asset managers – Grayscale Investments and Bitwise Asset Management – have halted their Ether (ETH) futures exchange-traded fund (ETF) plans amid increasing scrutiny from US regulators.
On May 17, Grayscale filed an amendment to its filing with the Securities and Exchange Commission (SEC) to remove mentions of an Ether futures ETF. The amendment comes less than a week after sharing plans to launch a trio of ETF products. The other two flagship products include a semi-spot Bitcoin (BTC) ETF that would invest in the BTC spot market, and a privacy ETF focused on investing in blockchain companies and privacy-focused digital assets.
Grayscale just filed for a semi-spot bitcoin ETF, as well as Ethereum Futures ETF and a Privacy ETF. Interesting… pic.twitter.com/MPruDolp7G
—Eric Balchunas (@EricBalchunas) May 9, 2023
Grayscale’s amendment to its ETF application came just days after the SEC asked the asset manager to withdraw its application for a Filecoin Trust. The regulatory body warned that its underlying asset, Filecoin (FIL), meets the requirements to be considered a security.
SEC tells Grayscale to withdraw the ether futures ETF filing, watch for the rest to follow suit, deja vu all over again. Scoop via â¦@VildanaHajricâ© pic.twitter.com/NUXy4pFfJi
—Eric Balchunas (@EricBalchunas) May 17, 2023
Grayscale responded to the SEC’s charge, alleging that the underlying asset does not qualify as a security. The company “intends to respond promptly to the SEC staff with an explanation of the legal basis for Grayscale’s position.”
Bitwise, for its part, has completely withdrawn its application to launch an ETH-based futures ETF. In its amendment filing with the SEC on May 17, the crypto asset manager stated that it does not “intend to seek the effectiveness of the fund and no security of the fund has been, and will not be, sold pursuant to the post-amendment above-mentioned effective registration statement of the trust”.
Bitwise did not respond to Cointelegraph’s request for comment on the matter at press time.
A Bitcoin-based futures ETF debuted in the last quarter of 2021, leading many in the crypto industry to believe that a spot cryptocurrency ETF is on the way. However, after two years and a barrage of cryptocurrency price crashes in 2022, regulators have become more skeptical of this type of product.
Clarification: The information and/or opinions expressed in this article do not necessarily represent the views or editorial line of Cointelegraph. The information presented here should not be taken as financial advice or investment recommendation. All investment and commercial movement involve risks and it is the responsibility of each person to do their due research before making an investment decision.
Investments in crypto assets are not regulated. They may not be suitable for retail investors and the entire amount invested may be lost. The services or products offered are not directed or accessible to investors in Spain.