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Grayscale Investments has removed staking from its spot Ethereum ETF proposal, aligning with industry trends and SEC recommendations. This strategic shift was revealed in an updated proxy statement filed on May 21.
Grayscale Aligns with Industry Trend, Removes Staking from Ethereum ETF Proposal Following SEC Guidance
Grayscale's updated proxy statement reveals a strategic alignment with other issuers in the market. The primary goal of Amendment No. 2 was to withdraw Proposal 2, which contained staking. According to CoinGape, This move echoes the actions of other issuers, such as Fidelity, who also removed staking incentives from their S-1 registration statement on May 21. This collective response to staking components in Ethereum ETF apps underscores a broader industry trend.
James Seyffart, an ETF analyst at Bloomberg, had anticipated Grayscale's modification. In a post on X, Seyffart had predicted that Grayscale would remove staking language from their filing to turn $ETHE into an ETH ETF. This foresight from a respected analyst adds weight to the understanding of Grayscale's decision and its implications.
Grayscale initially filed a Form 19b-4 with NYSE Arca in October, intending to convert the Grayscale Ethereum Trust into a spot ether ETF. This comes after they successfully converted the Grayscale Bitcoin Trust to a spot Bitcoin ETF following a court victory and SEC approval in January.
SEC's Recommendations Prompt Issuers to Amend Ethereum ETF Filings, Reflecting Industry-Wide Adjustments
The elimination of staking from Grayscale's proposal is part of a more significant trend among possible spot Ethereum ETF issuers. Recently, the SEC recommended that Nasdaq and the Chicago Board of Options Exchange (CBOE) amend their spot ether ETF filings. This proactive intervention by the SEC has sparked discussion regarding the potential clearance of these financial instruments.
Responding to the SEC's criticism, Cboe and five issuers, Fidelity, VanEck, Invesco/Galaxy, Ark/21Shares, and Franklin Templeton, filed modified 19b-4 reports. These revisions are critical as the deadline for issuers and exchanges to alter their files approaches. While the first of these, an application by VanEck and Cboe, has a final deadline of May 23, spot ether ETFs can only be launched when the SEC accepts the issuers' S-1 forms.
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