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SEC seeks comments on Ethereum spot ETF proposal from Galaxy and Invesco

The asset managers filed for an Ether spot ETF with the SEC in September last year.

SEC seeks comments on Ethereum spot ETF proposal from Galaxy and Invesco

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The Securities and Exchange Commission (SEC) has requested public comments on a proposed rule change to list and trade an Ethereum spot exchange-traded fund (ETF) from investment firms Galaxy Digital and Invesco, according to a filing published today.

The ETF, called the Invesco Galaxy Ethereum ETF, aims to track the spot price of Ether, the native token of the Ethereum blockchain network.

The SEC published the proposal in the Federal Register on November 8, 2023, and has now instituted proceedings to determine whether to approve or disapprove the listing.

In its proposal, the SEC outlined several areas where it is seeking feedback, including whether the ETF is properly filed under the Exchange’s rules for commodity-based trust shares, and whether arguments made for listing Bitcoin ETFs apply equally well to an Ethereum spot ETF.

“Do commenters agree that arguments to support the listing of Bitcoin ETPs apply equally to the Shares? Are there particular features related to ether and its ecosystem, including its proof of stake consensus mechanism and concentration of control or influence by a few individuals or entities, that raise unique concerns about ether’s susceptibility to fraud and manipulation?” the SEC queried in its request.

The regulator also asked for views on whether the proposed ETF would be susceptible to manipulation given the nature of the Ethereum market.

Other questions covered topics like the liquidity and transparency of Ether markets, potential surveillance-sharing agreements with trading platforms like Coinbase, and the correlation between Ether spot and futures prices.

Interested parties have until February 27, 2024, to submit comments on the proposed rule change. The SEC will then review the feedback as it decides whether to greenlight Galaxy and Invesco’s Ethereum ETF.

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