U.S. SEC Delays Decision on Spot Ethereum ETF Options

The U.S. Securities and Exchange Commission (SEC) has postponed its decision regarding the approval of options on spot Ethereum exchange-traded funds (ETFs) for the second time.

In a recent filing, the SEC stated that this delay is necessary for further analysis and public feedback, especially concerning whether the proposed rule change complies with the Securities Exchange Act. The SEC expressed concerns about potential market manipulation, investor protection, and maintaining a fair trading system, which are outlined under Section 6(b)(5) of the Act.

On August 7, NYSE American LLC, Grayscale, and Bitwise submitted a proposal to list and trade options for three products: the Bitwise Ethereum ETF, the Grayscale Ethereum Trust, and the Grayscale Ethereum Mini Trust, along with any trust that holds Ether.

This delay also involves evaluating whether BlackRock's iShares Ethereum Trust (ETHA), a spot Bitcoin ETF, can list and trade options. The agency has set November 10 as a deadline for deciding on the rule changes related to the Bitwise and BlackRock spot Ethereum ETFs, with ETHA covered in another SEC filing.

By initiating these proceedings, the SEC seeks to determine if the exchange has adequately demonstrated that the proposed Ether ETFs meet regulatory standards without introducing additional risks to investors or market stability.

Earlier this year, the SEC authorized eight Ethereum ETFs, which began trading on July 23.

As of Thursday, these funds reported net inflows of $79.74 million and trading volume of $466.39 million, which surpassed the usual daily trading volume ranging between $100 million and $200 million.