Key Points:

  • Grayscale files amendment to SEC filing to remove mentions of Ether futures ETF.

  • Bitwise withdraws application to launch an ETH-based futures ETF altogether.

Grayscale Investments and Bitwise Asset Management, have recently made the decision to halt their Ether futures exchange-traded fund (ETF) plans. This decision comes amid growing scrutiny from United States regulators.

Grayscale filed an amendment to its Securities and Exchange Commission (SEC) filing on May 17th to remove mentions of an Ether futures ETF. This move comes less than a week after the company shared 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

The decision to amend their ETF filing was made shortly after the SEC asked Grayscale to pull its application for a Filecoin Trust. The regulatory body warned that the underlying asset, Filecoin, was considered a security. Grayscale responded to the SEC’s accusation, claiming that the underlying asset did 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Bitwise, on the other hand, has withdrawn its application to launch an ETH-based futures ETF altogether. In its amendment filing with the SEC on May 17th, the crypto asset manager claimed that it does not “intend to seek effectiveness of the fund and no securities of the fund were sold, or will be sold, pursuant to the above-mentioned post-effective amendment to the trust’s registration statement.”

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

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, after two years and a barrage of crypto carnages in 2022, regulators have grown more skeptical of such products. As such, it is understandable why these two asset managers have decided to halt their Ether futures exchange-traded fund plans.

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