The U.S. Securities and Exchange Commission (SEC) has once again postponed its decision to approve spot Ethereum ETF options. The delay affects proposals from Bitwise and Grayscale, along with BlackRock’s application for the iShares Ethereum Trust (ETHA) options listing.
On July 23, the NYSE American LLC proposed a rule change to the SEC. This change, if approved, would allow options on Ethereum-based ETFs like Bitwise and Grayscale to trade on its platform. The proposal, labeled as “Ether ETPs,” aims to offer investors exposure to Ethereum without directly owning the cryptocurrency.
The SEC published the proposal in the Federal Register on Aug. 13, drawing no public comments at that time. In September, the SEC extended its review period. Now, the agency seeks more analysis to determine whether these Ether ETPs align with Section 19(b)(2)(B) of the Exchange Act.
Ethereum ETP options to follow existing ETF rules
Approval would place Ether ETPs in the same regulatory category as commodity-based ETFs, such as the SPDR Gold Trust, and would subject them to existing market rules for trading, position limits, and risk controls.
If cleared, Ether ETPs would provide American-style, physically settled options supported by the Options Clearing Corporation. The NYSE American Exchange has also assured that its systems can handle the additional trading volume.
The SEC believes that Ether ETP options could enhance market efficiency, offer investor protections, and make Ethereum more accessible. Additionally, these options may provide a lower-cost hedge and risk management tool for Ethereum investors.
The Commission is now collecting public opinions on whether the proposed rule meets investor protection standards and maintains market integrity under Section 6(b)(5) of the Exchange Act. The SEC invites public feedback, urging individuals to submit views on the proposal’s consistency with federal securities regulations.
