The United States Securities and Exchange Commission (SEC) has extended the timeline for making a decision regarding Fidelity’s proposed spot Ethereum exchange-traded fund (ETF). According to a recent court filing, the SEC has postponed its ruling until March 5th. This means that the regulatory body will take more time to assess and deliberate on the approval of Fidelity’s ETF before making a final decision.
“Completely expected”
The SEC’s decision to extend the timeline for considering Fidelity’s spot Ethereum ETF is explained in the filing, which states, “The Commission finds it appropriate to designate a longer period within which to take action on the proposed rule change so that it has sufficient time to consider the proposed rule change and the issues raised therein.”
This delay in the spot Ethereum ETF decision comes shortly after the SEC’s approval of a long-awaited spot Bitcoin ETF, a development that has generated significant excitement within the cryptocurrency community. Many believe that the approval of Bitcoin ETFs will contribute to greater mainstream adoption of cryptocurrencies in the United States.
Bloomberg ETF analyst, James Seyffart, shared his perspective on the matter, noting that the delay for Fidelity’s Ethereum ETF was expected and suggesting that the key dates to watch are likely in late May. This implies that market participants and observers should keep an eye on developments in the ETF space around that time.
Coinbase and the SEC faceoff in-court
The SEC’s decision to delay comes at a time when the agency is engaged in a legal dispute with Coinbase. The SEC has accused the exchange of selling unregistered securities on its platform.
During a hearing on Wednesday, Coinbase contested the SEC’s allegations, arguing that none of the tokens on its platform should be classified as securities.
Judge Katherine Polk Failla, who presides over the case, did not reach a decision on Wednesday. She expressed concerns about overstepping regulatory boundaries, stating, “I worry that I would be doing exactly the thing you’re alleging the Commission is doing here, which is to take power that I don’t have to stop activity I shouldn’t be stopping,” in response to a lawyer representing Coinbase.
This situation underscores the ongoing legal complexities and regulatory challenges within the cryptocurrency industry, as well as the debates surrounding the classification of digital assets as securities.
Under pressure
The SEC is currently facing criticism for its assertive approach towards cryptocurrency regulation. In an amicus curiae brief supporting Coinbase, Senator Cynthia Lummis (R-WY) argued that the SEC’s desire to categorize cryptocurrencies as securities goes beyond its jurisdiction, infringes upon Congress’s legislative authority, and violates the separation of powers.
Likewise, Ripple CEO Brad Garlinghouse voiced his disapproval of the SEC’s leadership during a conversation at the World Economic Forum. He expressed concerns about SEC Chair Gary Gensler’s actions, stating, “I do think the chair of the SEC, Gary Gensler, is a political liability in the United States. And I think he’s not acting in the interests of the citizenry, he’s not acting in the interests of the long-term growth of the economy, and I don’t understand it.”
The classification of Ethereum by the SEC remains uncertain, reflecting the ongoing debate and legal ambiguity surrounding the regulatory status of various cryptocurrencies and digital assets. This uncertainty contributes to the broader discussions about how cryptocurrencies should be regulated and governed in the United States.
