Grayscale and Bitwise are distancing themselves from Ether futures ETF plans

Two prominent crypto asset managers – Grayscale Investments and Bitwise Asset Management – ​​have halted their Ether (ETH) futures exchange-traded fund (ETF) plans due to growing scrutiny from US regulators.

On May 17, Grayscale filed an amendment to the Securities and Exchange Commission’s (SEC) application to remove listings from an Ether futures ETF. The amendment comes less than a week after sharing plans to launch a trio of ETF products. The other two flagship products include a semi-spot Bitcoin (BTC) 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 has just applied for a semi-spot bitcoin ETF, as well as Ethereum Futures ETF and a Privacy ETF. Interesting.. pic.twitter.com/MPruDolp7G

— Eric Balchunas (@Eric Balchunas) May 9, 2023

Grayscale’s amendment to its ETF filing came just days after SEC asked the asset manager to withdraw its filing for a Filecoin Trust. The regulatory body warned that the underlying asset, Filecoin (FIL), qualifies as a security.

SEC tells Grayscale to withdraw ETF application for ether futures, watch for the rest to follow suit, deja vu all over again. Scoop through@VildanaHajric⁩ pic.twitter.com/NUXy4pFfJi

— Eric Balchunas (@Eric Balchunas) May 17, 2023

Grayscale responded to the SEC’s accusation, claiming that the underlying asset does not qualify as a security. The company “plans to respond promptly to SEC staff with an explanation of the legal basis for Grayscale’s position.”

Bitwise, on the other hand, has completely withdrawn its application to launch an ETH-based futures ETF. In its amendment filed with the SEC on May 17, the crypto asset manager asserted that it does not “intend to pursue the effectiveness of the fund and that no securities of the fund have been sold or will be sold, in accordance with the above message. -effective amendment of the trust’s registration statement.”

Related: GBTC approval could bring “a few billion dollars” to investors: CEO of Grayscale

Bitwise did not respond to Cointelegraph’s request for comment on the matter at the time of publication.

A Bitcoin-based futures ETF debuted in the last quarter of 2021, leading many in the crypto industry to believe that a spot crypto ETF is on the way. However, after two years and a barrage of crypto massacres in 2022, regulators have become more skeptical of such products.

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