SEC pushes back Ethereum ETF options decision to November

The U.S. Securities and Exchange Commission has postponed its decision on approving options trading for spot Ethereum ETFs.

The SEC said in two separate filings that it needed “sufficient time to evaluate the proposed rule change” that would allow Nasdaq ISE LLC and NYSE American LLC to offer options trading for spot Ethereum ETFs.

Funds currently awaiting approval from the commission include BlackRock’s iShares Ethereum Trust (ETHA), Bitwise’s Ethereum ETF (ETHW), Grayscale’s Ethereum Trust (ETHE), and Ethereum Mini Trust (ETH).

BlackRock filed its rule change application for its ETHA product in August 2024, while Bitwise and Grayscale filed their own applications through NYSE American LLC in the same month.

Initially, the final decision was expected to be announced on September 26 and 27, 2024, but the regulator extended the review period to November 10 and 11, 2024.

This is typical under Section 19(b)(2) of the Securities Exchange Act. It gives the regulator more time to consider these decisions and is in line with its cautious approach to crypto-related ETPs.

Meanwhile, on September 20, the regulator approved options on BlackRock’s iShares Bitcoin Trust, allowing Nasdaq to list IBIT options under its ongoing listing standards. However, the approval came after a review period of almost eight months.

Nasdaq had to refile multiple amendments to provide additional information about Bitcoin-based ETPs throughout this process, starting on January 11, 2024. These amendments were necessary for the SEC’s extensive review and ensured that all regulatory concerns about market manipulation and other risks were addressed prior to approval.

The SEC’s extension comes as interest in spot Ethereum ETFs has waned, with nine funds seeing seven consecutive weeks of outflows. To date, those outflows have exceeded $620 million. In comparison, spot Bitcoin ETFs have seen inflows of over $17 billion since launch.

In other news, BlackRock has filed a change requiring its custodian Coinbase to process Bitcoin ETF withdrawals within 12 hours.

The change comes in response to growing concerns among investors about the lack of transparency in how Coinbase handles its Bitcoin holdings. The faster withdrawal process is intended to reassure investors that their assets are being managed appropriately and not through “paper BTC” or IOUs.