US SEC Extends Review of Franklin Templeton Ethereum ETF Application

The U.S. Securities and Exchange Commission (SEC) has postponed its decision on Franklin Templeton's application to launch an Ethereum exchange-traded fund (ETF). The SEC has extended the review period to provide adequate time for considering the proposed rule change and its implications. The Commission must decide on the application by June 11th, with the possibility of approving, disapproving, or initiating proceedings to determine whether to disapprove the change.

U.S. SEC Extends Review Period for Franklin Templeton's Ethereum ETF Application

The United States Securities and Exchange Commission (SEC) has postponed its decision on the application filed by Franklin Templeton Investments to launch an Ethereum exchange-traded fund (ETF).

In a public notice published on its website, the SEC announced its decision to extend the review period for the proposed rule change, which would allow the launch of the ETF. The Commission determined that more time was necessary to thoroughly analyze the application and its potential implications.

According to the SEC, it must make a determination regarding Franklin Templeton's application by June 11, 2023. The Commission has the authority to approve, disapprove, or initiate proceedings to determine whether to disapprove the proposed rule change.

The application submitted by Franklin Templeton in February sought to register a spot Ethereum ETF. If approved, the ETF would be custodied by Coinbase Custody Trust Company and listed on the Chicago Board of Options (BZX) Exchange. The ETF would utilize a cash-only structure for creating and redeeming shares, similar to mechanisms employed in Bitcoin-based ETFs.

The SEC's extension of the review period comes amidst a surge in interest from asset managers in establishing spot ETFs based on Ethereum. Following the launch of the first Bitcoin ETF, several leading firms have filed applications for Ethereum ETFs. The SEC has deadlines of May 23, 2023, to decide on applications filed by VanEck and ARK/21Shares.

In contrast to the delay in the U.S., the Hong Kong Securities and Futures Commission (SFC) has already granted approval for the launch of spot ETFs based on Ethereum. However, the specific product tickers associated with the approved applications have not yet been disclosed by the SFC.

The SEC's decision-making process on Franklin Templeton's application will be closely scrutinized by the cryptocurrency industry and investors alike. The outcome will provide insights into the SEC's regulatory stance towards spot Ethereum ETFs and its impact on the broader digital asset market.