Grayscale submits request to SEC to turn Ethereum trust into an ETF

Grayscale submitted an SEC filing to turn Ethereum trust worth around $4.9 billion into an ETF
The market has seen the launch of the first ETH futures by VanEck on Monday.
The asset manager is already fighting the SEC in court over its Bitcoin Trust's conversion into an ETF.

Grayscale is jumping on the Ethereum ETF hype that has gripped the market for a while now. Amidst the disheartening announcements made by the Securities and Exchange Commission (SEC) regarding spot Bitcoin ETFs, ETH Futures ETFs are observing a much more favorable environment.

Grayscale eyes Ethereum ETF

Grayscale announced on Monday that the asset management firm filed an application with the SEC to convert the Grayscale Ethereum Trust (ETHE) into a spot Ethereum ETF. The filing came in following the positive reaction noted by the regulatory body over the past couple of days concerning the barrage of Ethereum Futures exchange-traded funds (ETF) filings.

Amidst the many firms that filed for ETH ETFs, VanEck is set to launch the first fund this week on October 2 while others await confirmation from the SEC. The rush of approval was the result of the regulatory body's intent to green-light the filings before a potential US government shutdown.

Grayscale Ethereum Trust currently accounts for about 2.5% of the entire supply of ETH in circulation, valued at about $5 billion. However, unlike the rest of the ETH ETF filings noted towards the end of September, Grayscale intends to convert ETHE into a spot ETF and not a Futures ETF.

We’re proud to announce that @NYSE Arca has filed Form 19b-4 with the SEC to convert Grayscale Ethereum Trust $ETHE to a spot #Ethereum ETF. https://t.co/IAHDHTdeqp
(1/4) https://t.co/IAHDHTdeqp
— Grayscale (@Grayscale) October 2, 2023

This might be an issue for the asset management firm as approving spot ETFs has been a nightmare for applicants, given the SEC's strong stance against them. Earlier this week, a barrage of spot Bitcoin ETFs faced a delay in receiving an official decision from the Commission. Among the applicants were the likes of BlackRock, Ark Invest, 21Shares and more.

Grayscale is already battling the SEC

The request to convert the Ethereum Trust into a spot ETF is not the first instance of the asset management firm taking the SEC head-on. Back in June 2022, Grayscale filed a lawsuit against the SEC for rejecting the conversion of its Bitcoin Trust (GBTC) into a spot ETF.

Grayscale recently won the lawsuit when a three-judge panel of the District of Columbia Court of Appeals in Washington ruled in favor of the asset manager, stating that the SEC was wrong to reject the application. While the SEC can still appeal the court's decision, no move has been made yet, with the Commission stating it is still studying the ruling.

Thus, it might be difficult for the SEC to reject Grayscale's ETHE spot ETF application as the precedent set might make it challenging for the regulatory body to justify the rejection.

Like this article? Help us with some feedback by answering this survey:

Share: Cryptos feed

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.