US SEC Pushes Back Ruling on Invesco Galaxy Ethereum ETF
Please note that we are not authorised to provide any investment advice. The content on this page is for information purposes only.
The US Securities and Exchange Commission (SEC) has postponed its decision regarding approving trade shares for the Invesco Galaxy Ethereum ETF.
On January 10, the U.S. Securities and Exchange Commission (SEC) approved the first-ever spot Bitcoin exchange-traded funds (ETFs).
This approval signaled the increasing mainstream acceptance of digital assets and paving the way for broader investment opportunities in the crypto market.
SEC Extends Review Period to 240 Days Before Final Decision
According to a February 6 notice, the SEC would initiate proceedings to determine if Invesco Galaxy Ethereum ETF shares will be listed on the Cboe BZX Exchange.
However, the decision’s momentum was set back when the SEC announced a delay in approving the Ether spot ETFs.
— James Seyffart (@JSeyff) February 6, 2024
This development traces back to the Invesco Galaxy Ether ETF filing submitted in October 2023.
Invesco Galaxy just filed for a spot Ether ETF, I think this is the 3rd of 4th one of these, have to check tho.. pic.twitter.com/SIJVu8VzFk
— Eric Balchunas (@EricBalchunas) September 29, 2023
Having previously delayed an approval decision in December 2023, the SEC has now announced a 240-day extension.
The new extension grants stakeholders more time for public comment and regulatory review.
Interestingly, the SEC has delayed similar applications for spot Ether ETFs, including the Hashdex Nasdaq Ethereum ETF and the Grayscale Ethereum Futures ETF.
I’m genuinely confused as to why the SEC is so hesitant to approve all these ETFs…
If there is enough strong demand, clear uses cases in development, and millions of people wanting access, why do they make it so difficult to move forward?
Classic case of shooting ourselves in…
— A. G. Chronos (@realagchronos) September 29, 2023
Despite these regulatory setbacks, industry experts remain optimistic about the eventual approval of spot Ethereum ETFs.
Deep Dive into SEC’s New Rules
In another SEC development, the regulatory body implemented new regulations on February 6 to broaden its oversight of various market participants.
🚨💼 SEC's New Rules Could Impact Defi Liquidity Providers
The Securities and Exchange Commission (SEC) is rolling out stringent compliance regulations aimed at major capital investors in Treasury Markets.
However, certain provisions within these rules appear to have…
— ShariaChapin (@ShariaC21307) February 7, 2024
According to the 247-page regulation document, the SEC redefined the definitions of “dealer” and “government securities dealer.”
The SEC also adjusted the interpretation of “as a part of a regular business” within the context of the Securities Exchange Act of 1934.
Under the updated definitions, dealers may now be identified based on their trading activities, which resemble those of market-making.
The activities include trading interest near the best available prices for buying and selling the same security or earning revenue from bid-ask spreads and trading incentives.
An important criterion established by the new regulations is that dealers must manage or control assets totaling at least $50 million.
🇺🇲 SEC Announces new rules for Decentralized Exchanges.
If these rules gets implemented, all liquidity positions exceeding $50 million on decentralized exchanges may need to register with the SEC.
This comes at a time we are seeing growing demand for DEX platforms. pic.twitter.com/jcarmdxGwr
— Ajay Kashyap (@EverythingAjay) February 7, 2024
This threshold ensures the SEC targets significant market participants with substantial influence over market liquidity and stability.
Nevertheless, SEC Chair Gary Gensler asserts these regulations are grounded in common sense. He expressed that individuals engaged in such de facto market-making activities must register as dealers, in line with Congress’s original intent.
The proposed rules are set to take effect 60 days after publication in the Federal Register.
Europe & Canada Leads Ethereum ETF Market
Amid anticipation of potential spot Ethereum ETF approvals in the U.S., CoinGecko analysts conducted a comprehensive study.
According to the February 2 study, CoinGecko disclosed that Europe and Canada hold a 98% share of the $5.7 billion Ethereum ETF market.
Specifically, Europe commands an impressive 81.4% market share within the Ethereum ETF landscape.
This region hosts 13 ETH-backed ETFs, encompassing both spot products and futures funds, with combined assets under management (AUM) totaling $4.6 billion.
Canada also emerges as a significant player in the Ethereum ETF arena, capturing a 16.6% market share, equivalent to $949 million in AUM.
Notably, ETFs have served as an entry point into the crypto space for many Canadian investors. This comes amidst stricter regulatory measures imposed on cryptocurrency companies by local authorities.
Due to this regulatory climate, significant exchanges, including Binance and Bitstamp, have opted to exit the Canadian market. Meanwhile, the United States holds the fourth position in the Ethereum ETF market geographically.
However, analysts believe the SEC’s approval of various applications from asset managers will propel the U.S. as a major player.