Grayscale & Bitwise Halt Ether Futures ETF Plans: SEC Warning Cited
• Two prominent crypto asset managers, Grayscale Investments and Bitwise Asset Management, have halted their Ether (ETH) futures exchange-traded fund (ETF) plans.
• Grayscale filed an amendment to its SEC filing to remove mentions of an Ether futures ETF after being warned by the SEC about its Filecoin Trust application.
• Bitwise withdrew its application to launch an ETH-based futures ETF altogether in response to the SEC’s warning.
Grayscale Halts Plans for Ether Futures ETF
Grayscale Investments has stopped its plans for an Ether (ETH) futures exchange-traded fund (ETF) after a warning from the United States Securities and Exchange Commission (SEC). The firm amended its SEC filing to remove any mention of such a product on May 17th.
Bitwise Withdraws Application for Ethereum ETF
In response to the SEC’s warning, Bitwise Asset Management withdrew its application to launch an ETH-based futures ETF altogether on May 17th. The firm stated that it does not “intend to seek effectiveness of the fund and no securities of the fund was sold, or will be sold, pursuant to the above-mentioned post-effective amendment to the trust’s registration statement.”
Other Products Being Developed by Grayscale
Aside from halting plans for an Ether futures ETF, Grayscale also shared plans last week for two other products: a semi-spot Bitcoin (BTC) ETF that would invest in the spot BTC market; and a privacy ETF focused on investing in privacy-focused blockchain companies and digital assets. However, it remains unclear if these products will still be launched following the recent SEC warnings.
SEC Accusation Regarding Filecoin Trust
The SEC accused Grayscale of having an underlying asset that qualified as a security in regards to its Filecoin Trust application and asked them withdraw their filing for this product on May 10th. In response, Grayscale claimed that their underlying asset did not qualify as a security and said they “intend to respond promptly with an explanation of their legal basis for this position”.
It seems that growing scrutiny from US regulators has caused both Grayscale Investments and Bitwise Asset Management halt their plans for Ether futures exchange-traded funds (ETF). It remains unclear what implications this will have on other products being developed by these two firms or if regulators will continue cracking down further in future months.