Rebuttal against rumors of SEC engagement with issuers, Grayscale General Counsel expresses strong confidence in Ethereum spot ETF
Despite the SEC's recent delay of the Ethereum spot ETF application, Craig Salm, the Chief Legal Officer of Grayscale, remains confident in the approval.
SEC delays Grayscale's Ethereum futures ETF application, but is it still part of Grayscale's plans?
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Grayscale Early Discussions with SEC
Grayscale's General Counsel, Craig Salm, mentioned that there has been a lot of discussion in the crypto space recently about the low probability of an Ethereum spot ETF approval, but he personally remains undeterred and believes that an Ethereum ETF should be approved.
He specifically wanted to address the rumors of "too little negotiation between SEC and issuers," and he raised a few points:
Grayscale had in-depth discussions with the SEC last year regarding the Bitcoin ETF redemption process, cash versus physical settlement, Qualified Participant (AP), and custody details.
The only difference now is that Bitcoin has been replaced with ETH.
The SEC has been deeply involved in the issuance mechanism of a Bitcoin ETF for some time, it's just that there are fewer issuers for an Ethereum spot ETF compared to a Bitcoin ETF.
1/ Recently, there’s been a lot of chatter about spot #Ethereum ETFs. I personally am not deterred by it and believe the ETFs should be approved. But right now I want to talk about how I think perceived “lack of SEC engagement” should be viewed at this point:
— Craig Salm (@CraigSalm) March 25, 2024
SEC Familiar with Cryptocurrency ETF Mechanisms
Craig Salm believes that after experiencing the Bitcoin spot ETF, the SEC is familiar with most matters, so the lack of involvement from regulatory bodies should not be seen as a reason for the Ethereum ETF not to pass.
Additionally, similar to the reasons why the Bitcoin ETF was approved, the Ethereum futures ETF and spot ETF are consistent and highly correlated.
Craig Salm stated:
Investors want to access Ethereum in the form of a spot ETF, and Grayscale believes that this situation is just as compelling as the Bitcoin ETF. We also look forward to collaborating with the SEC on these important products.
Analysts Less Optimistic about Ethereum Spot ETF
Bloomberg ETF analyst Eric Balchunas stated on March 11th that the probability of an Ethereum spot ETF being approved in May has dropped to 35%, but he also emphasized that 35% does not mean there is no chance at all, and in the long run, he believes approval will eventually happen.
Bloomberg Analyst: Probability of Ethereum Spot ETF Approval in May Drops to 35%
However, another Bloomberg analyst, James Seyffart, is more pessimistic in his views. He stated:
My optimism about the Ethereum ETF has changed in recent months, and now we believe it will be rejected by the May 23rd deadline. The SEC has not been in contact with the issuer regarding the specific details of the ETF issuance, which is completely different from the Bitcoin ETF last year.
Evidently, Grayscale's General Counsel, Craig Salm, is rebutting the claim of "SEC not being in contact with the issuer regarding the specific details of the ETF issuance."