Grayscale’s Ether Futures ETF app is being pulled, reason undisclosed

A major asset manager of Grayscale’s Ether futures exchange-traded fund (ETF) has withdrawn a proposed listing and trading of shares, according to a new document filed on Tuesday.

The US Securities and Exchange Commission (SEC) filing revealed that the application of the Grayscale Ethereum Futures Trust ETF, filed by NYSE Arca, Inc. in September last year, he retired on May 3.

The agency had previously delayed consideration of Grayscale’s Ether Futures ETF, with the most recent postponement coming in March.

However, the SEC had approved a batch of ether futures ETFs in October 2023, including those from ProShares, VanEck and Bitwise.

Bloomberg ETF analyst James Seyffart was the first to do so pointed outthe development. Initially, Seyffart believed that Grayscale had a strategic plan to use its ether futures ETF to influence the securities regulator to approve its spot ETH ETF.

He found it puzzling that Grayscale withdrew its application, especially with the SEC scheduled to rule on at least one spot ether ETF application on May 23, just over two weeks away.

Seyffart, along with fellow analyst Eric Balchunas, had previously estimated a 25% chance of approval for spot ether ETFs in May, down from 70% in January.

Even with Grayscale’s withdrawal, Seyffart now sees the company as having no alternatives if the SEC doesn’t approve its spot ETF.

“If you don’t want to piss off the SEC. Withdrawing and refiling is less work for the SEC. But at the same time it means there’s no way Grayscale or anyone can sue now.”

However, SEC Chairman Gary Gensler’s comments in an interview with CNBC on May 7 suggest that the SEC is still deliberating on Ether ETF applications.

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