The US Securities and Exchange Commission (SEC) is expected to reject spot Ether exchange-traded funds (ETF) in May, a new report shows.

SEC will reject Ethereum ETF applications

Reuters reported on April 24 that U.S. issuers and other companies expect the SEC to reject applications for spot Ether ETFs next month. This expectation follows recent meetings with the regulator, according to four people present at these discussions.

The four individuals, who spoke on condition of anonymity due to the confidential nature of the discussions, said the recent meetings between issuers and the SEC have been one-sided, and that the regulator’s staff has not shared substantive details about the proposed products.

Many analysts agree that the SEC will likely delay the potential approval of Ether ETFs.

Todd Rosenbluth, an ETF data analyst at VettaFi, said it is more likely that approval will be delayed until later in 2024 or even longer. He added that the regulatory landscape is still “unclear.”

Bloomberg ETF analyst Eric Balchunas estimated in March that the chance that the SEC would approve a spot Ether ETF in May was around 35%. He also mentioned that he had credible information indicating that the SEC may be deliberately under-communicating with potential fund issuers.

Balchunas also noted that SEC Chairman Gary Gensler’s stance on Ether could also impact the decision-making process, as Gensler has declined to provide clarity on whether Ether is a security.

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