NYSE Arca Withdraws Grayscale Ethereum ETF Proposal Amid Speculation

NYSE Arca withdraws key Ethereum ETF filing, sparking speculation on future crypto ETFs.

Just days ago, NYSE Arca pulled a big filing it made with the Securities and Exchange Commission (SEC) in relation to the Grayscale Ethereum Futures Trust ETF listing rule change proposal.

It took place on the 3rd day of May, avoiding the mandatory decision by the SEC within a month from the day of notification.

It was announced on May 7 and could have direct consequences for the upcoming Ethereum Spot Exchange-Traded Funds (ETFs) if applied.

Grayscale filed what can only be called a 19-b4 in an attempt to get the SEC to clear up its position with regard to futures-based ETFs.

Scott Johnson of Van Buren Capital GP says the filing is something of a tactical move to record an SEC analysis ahead of the deadlines that both have been set for the Ethereum spot ETFs.

Johnson was left to wonder what had triggered the withdrawal, as he believed that while it still fell far short of an assurance of approval, the documented decision would be a support for some future regulatory engagements by Grayscale.

Bloomberg ETF analyst James Seyffart said the proposal is a "Trojan horse" because a rejection would have given Grayscale grounds to challenge the SEC.

It is only a supposition, but if true, private conversations Grayscale had with the SEC likely did persuade the firm to change its mind, he said.

Seyffart thinks this could have been a way for them to make peace with the SEC and give away potential legal tactics. This withdrawal is in some way related to the futures ETF but is part of a larger design by Grayscale to change its Grayscale Ethereum Trust (ETHE) into a spot ETF. These findings of these processes represent important determinants in the regulatory framework of cryptocurrency investments in the U.S. up to now. Grayscale has not commented on the reasons for the withdrawal, so still, the possibilities can be made out as to what kinds of impacts it had.