SEC Extends Review Period for Invesco and Galaxy Digital’s Ether ETF

The Securities and Exchange Commission (SEC) of the United States has recently decided to delay its judgment about the exchange-traded fund (ETF) that Invesco and Galaxy Digital have proposed to be a spot Ether (ETH) currency. During this delay, the SEC will conduct a comprehensive evaluation of the possibility of listing and trading such an ETF on the Cboe BZX Exchange.

The SEC has extended the timeframe for its final decision by an additional 35 days, making it possible for the public to provide feedback on the plan. The proposal was published in the Federal Register. Because of this step, the SEC will have up to 240 days in total to reach a final judgment about the ETF. The first file will be submitted by the asset management in October 2023, and it will be published in November. This brings the deadline for the SEC’s decision to July 2024.

Prior to granting approval for the public trading of Ether-based ETFs, the SEC has historically taken a cautious stance toward financial products connected to cryptocurrencies. This deferral reflects the SEC’s goal to guarantee full market assessment and investor protection.

In its request for public comments on this proposal, the SEC highlights its effort to gather insights on various aspects, such as the ETF’s compliance with the Exchange’s rules for commodity-based trust shares and considerations about the distinctive characteristics of Ether and its ecosystem, such as its proof of stake consensus mechanism and the concentration of control or influence.

In order to provide investors with a well-regulated and publicly traded vehicle through which they may obtain exposure to Ether, the proposed Invesco Galaxy Ethereum ETF intends to monitor the spot price of Ether. This project is a part of a larger trend of investment businesses that are looking to incorporate bitcoin assets into conventional financial markets. The goal of this movement is to provide a bridge between digital currencies and fiat currencies within the context of regulated frameworks.

As part of a larger narrative in which regulatory bodies are weighing the integration of cryptocurrencies into mainstream financial products, the SEC is currently deliberating over the Invesco Galaxy Ethereum ETF. The outcome of this discussion has the potential to establish precedents for future cryptocurrency ETFs and other financial instruments that are based on digital assets.

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