Grayscale Withdraws Proposed Ethereum Futures ETF Application

By: Eliza Bennet

Grayscale, a leading crypto investment firm, has made a significant move by withdrawing its Ethereum Futures ETF application with the US SEC. This withdrawal, reported on May 7, could potentially have critical consequences for spot Ethereum ETFs.

The withdrawal took place on May 3, days before the SEC notice with an initial deadline slated for May 30. This proposal was aimed at facilitating listing and trading shares of Grayscale's Ethereum Futures Trust ETF through a proposed rule change under the 19-b4 filing.

The decision to withdraw the proposal has raised queries within crypto-industry analysts. Among these, one assumption puts forth the idea that Grayscale might have decided to avoid a likely 'approve futures, deny spot' strategy that could lead to court complications.

This move does not influence Grayscale's more prominent endeavor in the conversion of its Grayscale Ethereum Trust (ETHE) to a spot ETF. However, the two filings are understood to have a somewhat implicit connection.