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PARIS — Issuers of spot bitcoin exchange-traded funds question the near-term likelihood of the U.S. Securities and Exchange Commission approving such a cryptocurrency product ether.
The regulator has an end-May deadline to conclude its review of an ether ETF. This comes after the SEC in March delayed the original deadline for a decision on the ether ETF application.
Companies that go from Black rock at Fidelity and VanEck, which have issued spot bitcoin ETFs this year, are awaiting approval for an ether product.
Some issuers are unsure whether the SEC will greenlight Ether applications.
“We were also the first to apply for Ethereum in the United States, and we and [Ark Invest CEO] Cathy Wood, I’m kind of first in line for May, I guess, to probably get rejected,” VanEck CEO Jan Van Eck told CNBC’s Arjun Kharpal at the Paris Blockchain Week crypto event in Paris, France.
Ark Invest was not immediately available for comment when contacted by CNBC.
“The way the legal process goes is that regulators will give you comments on your request, and that happened for weeks and weeks before Bitcoin ETFs – and right now, the pins are dropping as far as Ethereum is concerned,” Van Eck added.
Excitement has been growing in the crypto community for an ether ETF since the SEC approved the first spot bitcoin ETFs in January. But the SEC has signaled that it may not be so willing to approve such an investment product.
SEC Chairman Gary Gensler has previously pointed out that, according to the SEC, “the vast majority of cryptoassets are investment contracts and therefore subject to federal securities laws.”
This complicates things for an ether ETF.
“We are watching Ethereum’s decision very, very closely,” CoinShares CEO Jean-Marie Mognetti told CNBC on Tuesday. “CoinShares was in the running for the Bitcoin ETF just three months before approval, and we were able to qualify at the last minute.”
He was equally pessimistic about the chances of winning such approval in the short term.
“I don’t see anything getting approved this part of the year,” he noted, suggesting that it may be difficult to get SEC approval for proof-of-stake, a blockchain-specific protocol.
Bitcoin is underpinned by a different protocol, known as proof-of-work, in which volunteer miners validate transactions and mint new tokens.
The SEC did not dispute the proof of work from a securities law perspective.