The decision about the approval of options trading for spot Ethereum exchange-traded funds has been postponed by the United States Securities and Exchange Commission for a period of time. The Securities and Exchange Commission (SEC) stated in two separate filings that it wants sufficient time to look into the proposed rule change that would enable Nasdaq ISE LLC and NYSE American LLC to provide options trading for spot Ethereum exchange-traded funds (ETFs).
The funds that are now vying for the commission’s approval are the iShares Ethereum Trust (ETHA) offered by BlackRock, the Ethereum Exchange Traded Fund (ETHW) offered by Bitwise, the Ethereum Trust (ETHE) offered by Grayscale, and the Ethereum Mini Trust (ETH).
In August of 2024, BlackRock submitted a request to modify the rules governing its ETHA product. Bitwise and Grayscale then followed suit with their own submissions through NYSE American LLC throughout the same month.
In the beginning, it was anticipated that a final decision would be made by September 26 and 27, 2024; however, the commission has decided to prolong the review process to November 10 and 11, 2024. The Securities Exchange Act, specifically Section 19(b)(2), allows for situations like these to occur. It conforms to the regulator’s cautious stance toward crypto-related exchange-traded funds (ETPs) and provides the agency with additional time to evaluate these judgments.
BlackRock’s Bitcoin ETF Options Approved, Ethereum ETFs Lag
In the meantime, on September 20th, the regulatory body gave its approval to options on BlackRock’s iShares Bitcoin Trust. This gave Nasdaq the ability to list IBIT options in accordance with its regulations regarding continued listing. However, the approval was granted following a review phase that lasted for approximately eight months. Throughout the entirety of this procedure, beginning on January 11, 2024, Nasdaq was required to resubmit various revisions in order to supply new information concerning Bitcoin-based exchange-traded funds (ETPs).
These modifications were essential for the SEC to conduct a comprehensive assessment, which was necessary to guarantee that all regulatory concerns regarding market abuse and other hazards were resolved prior to approval. The SEC’s decision to extend the deadline comes at a time when interest in spot Ethereum exchange-traded funds (ETFs) is on the decline. The nine funds have had outflows for seven weeks in a row. As of this moment, these outflows have surpassed 620 million dollars. In comparison, spot Bitcoin exchange-traded funds have seen inflows of more than seventeen billion dollars since their launch.
In related news, BlackRock has submitted an amendment that mandates its custodian to execute withdrawals from Bitcoin exchange-traded funds within a period of twelve hours. A growing number of investors have expressed concerns regarding the level of openness when it comes to the management of Bitcoin holdings. A faster withdrawal process is being implemented with the intention of assuring traders that their investments are being managed responsibly and not through paper BTC or IOUs.
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