SEC solicits comments on Fidelity’s spot Ether ETF application

The United States Securities and Exchange Commission called on the public to comment on a proposed rule change that could allow asset management firm Fidelity to offer shares of its spot Ether (ETH) exchange-traded fund, or ETF.

In a Nov. 30 notice, the SEC said “interested persons” may comment on the Fidelity offering, proposing the Cboe BZX Exchange list and trade shares of its Fidelity Ethereum Fund. Fidelity first filed for approval of the fund on Nov. 17, becoming one of many firms looking to throw their hats into the ring for a spot crypto ETF in the United States.

Has been long known that Fidelity entered the spot ETF race but this filing *essentially* starts the ~240+ day clock for their spot #Ethereum ETF. Just another step in the process. Will have definitive deadline dates in the coming weeks https://t.co/0C6NKcxNNz pic.twitter.com/gdW9ZQDgs9

— James Seyffart (@JSeyff) November 30, 2023

The filing noted that investors in other countries, “including Germany, Switzerland and France,” had opportunities to gain exposure to Ether through exchanges offering exchange-traded products. At the same time, the U.S. “lacked a U.S. regulated, U.S. exchange-traded vehicle.” Members of the public will have 21 days to submit comments upon publication of the filing in the Federal Register.

“U.S. investors […] are left with fewer and more risky means of getting ether exposure,” said the filing. “The lack of an ETP that holds spot ETH […] exposes U.S. investor assets to significant risk because investors that would otherwise seek crypto asset exposure through a Spot ETH ETP are forced to find alternative exposure through generally riskier means.”

The filing added:

“Approval of a Spot ETH ETP would represent a major win for the protection of U.S. investors in the crypto asset space.”

The SEC has not approved any listing of a spot cryptocurrency exchange-traded product or fund for U.S. markets despite applications from many firms going back years. Exchanges began listing and trading shares of ETFs tied to Bitcoin (BTC) futures in October 2021 and debuted nine Ether futures ETFs in October 2023.

Many reports and experts have suggested the SEC could be nearing a decision on a spot crypto ETF for listing on U.S. markets. It would be one of the most significant positive trends toward mainstream crypto adoption if approved. At the time of publication, the commission had not given the green light to any spot Bitcoin or Ether investment vehicle.

Magazine: BlackRock meets with SEC over ETF, Binance’s new era begins and SBF loses release bid: Hodler’s Digest, Nov. 19–25