SEC delays decision on BlackRock's spot ethereum ETF proposal, seeks public feedback

Quick Take

The SEC delayed making a decision and asked for public comment for two proposed spot Ethereum ETFs from Fidelity and BlackRock.
The agency asked specifically about whether Ethereum’s proof of stake mechanism raised ” unique concerns about ether’s susceptibility to fraud and manipulation.”

The Securities and Exchange Commission has delayed its decision timeline on BlackRock's proposal for a spot Ethereum exchange-traded fund, according to a Monday filing.

This marks the second time the SEC has pushed back its decision for BlackRock's iShares Ethereum Trust. The regulator also asked questions on Monday from the public on whether the ETF should be approved and asked specifically about whether Ethereum's proof of stake mechanism raised " unique concerns about ether’s susceptibility to fraud and manipulation."

The SEC also delayed making a decision on Fidelity's spot Ethereum ETF, according to a filing Monday and solicited comments from the public. The agency asked similar questions as it did for BlackRock.

Comments for both are due in the next 21 days and rebuttals are due in 35 days.

Both BlackRock and Fidelity filed for their spot Ethereum ETFs in November. Since then, other firms have filed, including Franklin Templeton, Ark 21Shares, VanEck and Grayscale. BlackRock, Fidelity and others launched spot bitcoin ETFs after getting approval from the SEC earlier this year.

Is an approval coming?

Crypto experts disagreed on whether a spot ether ETF is on the horizon, with some on the more positive side saying they anticipate an approval from the SEC could come as early as May, as pointing to the bitcoin ETFs' recent approvals as leading the way for spot ether ETFs.

Conversely, individuals with a more cautious outlook view the approval of spot ether ETFs as uncertain, a sentiment echoed by Variant Fund Chief Legal Officer Jake Chervinsky in his comments on X over the weekend.

"I’m not saying for certain that the spot ETH ETF won’t be approved by May 23," Chervinsky said. "I’m just saying that the legal issues and policy environment in DC make denial (or an SEC request to withdraw) more likely than general sentiment suggests. 'Blackrock always wins' is a lazy bull take."

SEC Chair Gary Gensler, meanwhile, has said the agency's approval of spot bitcoin ETFs are just "cabined" to those and "shouldn't be read to be anything other than that."

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