SEC Delays Ruling on Fidelity’s Ethereum ETF Application

The U.S. Securities and Exchange Commission (SEC) has extended its period of deliberation regarding asset manager Fidelity’s proposed exchange-traded fund (ETF) based on the cryptocurrency Ethereum.

The SEC has until March 5th to decide whether to approve or deny the listing.   The. Bloomberg’s ETF analyst, James Seyffart, mentioned in a January 18 tweet that he anticipated the delay. He fully expected the decision to be pushed to a later date.

Originally, the regulatory body had a deadline of January 18th to determine the fate of Fidelity’s Ether ETF bid. However, the SEC opted to invoke a 45-day delay to allow more time to examine the proposed rule change and address associated considerations carefully.

This resets the SEC’s deadline clock to March 5, 2024, for ruling on the ETF. The extension permits comprehensive scrutiny to ensure adequate investor protections around the novel crypto-based fund.

The delayed decision comes amid the SEC’s recent approval of several Bitcoin ETFs. Unlike Bitcoin, Ethereum’s status as a potential security or commodity remains ambiguous in the eyes of regulators like SEC Chairman Gary Gensler.

This uncertainty casts doubt on whether the Commission approves a fund tracking the value of the second-largest cryptocurrency. The agency continues exercising cautious examination of crypto ETF filings.

Ethereum’s native token, Ether (ETH), faced selling pressure in line with broader crypto market declines following the SEC’s ruling delay. ETH dropped 3% to around $2,459 but held above key technical support.

While the ETF ruling creates short-term headwinds, the fundamental bull case for Ethereum remains intact, with momentum shifting toward approval in 2024 if the SEC gains clarity around uncertainties.

Also read: Kiln Secures $17M for Crypto Growth & Innovation