Grayscale Investments is utilizing its Ether (ETH) futures exchange-traded fund (ETF) utility as a “computer virus” to nook the USA Securities and Trade Commission into approving its spot Ether ETF, says Bloomberg ETF analyst James Seyffart.
Seyffart mentioned in a Nov. 15 X (Twitter) publish following the SEC delaying Grayscale’s ETH futures ETF bid that he believes if the SEC approves Grayscale’s utility, then it might allow Grayscale to argue for the approval of its spot Ether ETF utility.
If the SEC denies Grayscale’s bid, the asset supervisor may argue the SEC is treating Bitcoin (BTC) and Ether futures ETFs in another way by permitting one underneath the Securities Act of 1933 however not the opposite.
“Watch [the SEC] attempt to both approve and argue why that is completely different from spot. Or Deny and argue why 1933 act merchandise are meaningfully completely different from 1940 act merchandise. Each are dangerous for SEC [in my opinion]. Genius transfer.”
Grayscale’s Ether futures ETF bid was submitted by way of a kind 19b-4 — which exchanges file to tell the SEC of a security-based swap request. Seyffart mentioned not one of the 40 or so accepted Ether ETF merchandise went via the 19b-4 approval course of.
Seyffart was initially not sure why Grayscale filed its Ether futures ETF by way of a 19b-4. He now believes Grayscale is enjoying “chess” with the SEC by utilizing the Ether Futures ETF as a “computer virus” to acquire a 19b-4 order from the regulator to nook them right into a lose-lose state of affairs.
I used to be initially not sure why they might even file for this. However my ideas have developed over the previous couple of weeks and they’re principally this:
Grayscale is enjoying Chess, not checkers right here. They’re possible hoping to drive the SEC into issuing a 19b-4 choice on an ETH futures ETF.…
— James Seyffart (@JSeyff) November 15, 2023
Seyffart and Scott Johnsson, Normal President at Van Buren Capital Normal, agreed Grayscale wouldn’t launch the Ether futures ETF.
“Uncertain this product ever trades, however helpful as a vessel to get spot ETH over the end line,” Johnsson mentioned.
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Seyffart’s feedback come because the SEC delayed its choice on Grayscale’s Ether futures ETF on Nov. 15 — two days sooner than its Nov. 17 deadline. Seyffart mentioned he wasn’t shocked by the delay.
Hashdex’s utility to transform its Bitcoin futures exchange-traded fund (ETF) right into a spot product was additionally placed on maintain by the securities regulator on Nov. 15.
BlackRock shared an identical sentiment to Seyffart final week, arguing that the SEC does not have a professional motive to deal with cryptocurrency spot and futures ETF purposes in another way.
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