SEC Is Likely to Reject Spot Ethereum ETFs On The Reason That ETH Is A Security

Read more: What Is A Spot Ethereum ETF？ How Important Is The New Ether ETF？

SEC Evaluation Sparks Doubts on Spot Ethereum ETF Approval

Bloomberg analyst James Seyffart weighed in, indicating an increased possibility of the SEC rejecting the Ethereum ETF on the grounds of its security classification. However, Seyffart also expressed personal belief that the SEC might not categorize Ethereum as a security in upcoming decisions.

Under Gary Gensler‘s SEC, known for its cautious approach to cryptocurrency, attention has shifted to Ethereum, with pending applications for a spot Ethereum ETF. Delays in SEC engagement and Grayscale’s withdrawal have spurred doubts within the community regarding imminent approval.

In a recent filing, 21Shares omitted a clause permitting asset staking via third-party providers, possibly in response to SEC feedback, noted Bloomberg ETF analyst Eric Balchunas.

Read more: Ethereum ETF Applications: Is There Potential For New Breakthrough？

Analysts Adjust Approval Odds Ahead of Key Decision Deadlines

Seyffart and Balchunas, previously optimistic about spot Ethereum ETF approvals, now estimate a 25% chance for approval by May 23, down from 70% in January.

Critical decisions loom, with the SEC‘s ruling on VanEck’s application due May 23, and deadlines for ARK 21Shares and Hashdex on May 24 and May 30, respectively. The outcome will significantly impact the trajectory of Ethereum within the regulated investment landscape.