Grayscale and Bitwise distance themselves from Ether futures ETF plans

Grayscale has stopped its ETH futures ETF plans after a warning from the SEC, while Bitwise amended its SEC filing to halt any launch of Ether ETF products.

Two prominent crypto asset managers, namely Grayscale and Bitwise, have put a halt on their ETH futures exchange-traded fund (ETF) plans amid growing scrutiny from United States regulators.

Grayscale filed an amendment to its Securities and Exchange Commission filing on May 17 to remove mentions of Ethereum futures ETF. The amendment comes just within a week of sharing plans to launch a trio of ETF products. The other two flagship products include a semi-spot bitcoin ETF that would invest in the spot BTC market and a privacy ETF focused on investing in privacy-focused blockchain companies and digital assets.

Grayscale just filed for a semi-spot bitcoin ETF, as well as Ethereum Futures ETF and a Privacy ETF. Interesting.. pic.twitter.com/MPruDolp7G

— Eric Balchunas (@EricBalchunas) May 9, 2023

Grayscale’s amendment to its ETF filing came just days after SEC asked the asset manager to pull its application for a Filecoin Trust. The regulatory body warned that its underlying asset, Filecoin qualifies as a security.

SEC tells Grayscale to withdraw the ether futures ETF filing, watch for the rest to follow suit, deja vu all over again. Scoop via ⁦@VildanaHajric⁩ pic.twitter.com/NUXy4pFfJi

— Eric Balchunas (@EricBalchunas) May 17, 2023

Grayscale responded to SEC’s accusation on 17th May, claiming the underlying asset does not qualify as a security. The firm “intends to respond promptly to the SEC staff with an explanation of the legal basis for Grayscale’s position.”

Bitwise on the other hand has withdrawn its application to launch an Ether-based futures ETF altogether. In its amendment filing on May 17 with the SEC, the crypto asset manager claimed that they no longer “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.”

Bitwise didn’t respond to Cointelegraph’s request for comments on the issue at the time of publication.

Bitcoin-based futures ETF debuted in the last quarter of 2021 making many in the crypto industry believe that a spot crypto ETF is on the way. However, almost two years down the line and a barrage of crypto carnages during the 2022 bear market, the regulators have grown more sceptical about such products.

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