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Spot Ethereum ETF: Top Crypto Lawyer Is Pessimistic on 2024 Approval

Spot Ethereum ETF

It is barely two months into the year, and Variant’s Chief Legal Officer Jake Chervinsky already feels like there is no possibility of having the United States SEC’s nod with respect to spot Ethereum ETFs. 

US SEC Trying to Avoid Backlash on Spot Ethereum ETF

The crypto lawyer clearly stated his lack of optimism in having an Ethereum ETF approval in 2024. Chervinsky pointed to the fact that the SEC received several backlashes including political blowbacks for giving its approval to spot Bitcoin ETFs. 

He believes that greenlighting an Ethereum ETF will only add to the criticism.

In Chervinsky’s opinion, the SEC has enough argument to justify a denial of the applications if it chooses. These arguments, he says may be wrong, however, the SEC has no fear in taking a wrong legal stand once it satisfies political priority. 

I am a lot less confident about ETH ETF approval this year than many of you are.

The SEC got a ton of political blowback for approving BTC ETFs, even though the court basically forced it to.

Now animal spirits are in control of the market, and an ETH ETF would only add to that.

— Jake Chervinsky (@jchervinsky) March 1, 2024

For context, the crypto lawyer cited leading asset management firm BlackRock, highlighting the fact that it received its approval for its spot Bitcoin ETF as a result of a collaborative relationship with the regulator. Chervinsky mentioned that it was also the result of the ability of the firm to consistently put pressure.

Applicants Awaiting SEC’s Decision

Several investment asset management firms including BlackRock and Grayscale have indicated their interest in spot Ethereum ETFs by submitting an application with the U.S. securities agency. BlackRock officially submitted its Ethereum ETF application sometime in November 2023, way before it received approval for its spot Bitcoin ETF dubbed iShares Bitcoin Trust (IBIT).

Michael Sonnenshein-led Grayscale is also in the race and filed its application about a month before BlackRock’s. 

The firm requested a conversion of its Ethereum Trust (ETHE) to a spot Ethereum ETF. Hence, it filed Form 19b-4 with the U.S. SEC along with NYSE Arca. Asset managers who have equally indicated their interest in the offering are Franklin Templeton, VanEck, ARK 21Shares, and many others.

While the applications are peculiar to each one of them, they all have one thing in common; waiting for the SEC to make a decision on their application. The regulator has been stalling in making a decision on whether to accept or reject their individual proposals. SEC extended Grayscale’s review period after scheduling Jan 25 as the deadline. 

BlackRock’s spot Ethereum ETF supposed approval date is still March 10 but there might be another extension by the regulator.

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