The U.S. Securities and Exchange Commission (SEC) has delayed making a decision regarding whether to allow Cboe BZX Exchange listing options tied to Fidelity’s Ethereum Fund. The consideration period for the proposal was extended, with additional time given for the agency to consider the implications.
Cboe BZX Exchange submitted the request on Jan. 24, 2025. The proposal requested listing and trading approval for options in the Fidelity Ethereum Fund. The exchange revised its filing on February 3, 2025.
The SEC later made the proposal available for comment in the Federal Register on February 13, 2025. It garnered neither public nor industry stakeholder comment.
SEC extends review period for evaluation
The SEC has 45 days from the date of publication, according to the Securities Exchange Act, during which time it can either approve, disapprove, or seek further review of the proposal.
That deadline is March 30, 2025. However, the statute authorizes the SEC to extend the review period by as much as 90 days if it believes a longer review is necessary. The Commission has now exercised that option, pushing the deadline for a decision back to May 14, 2025.
The agency said the delay gives more time for thoughtful consideration. Crypto-based investment products bring unique challenges, and regulators ensure proper oversight.
The SEC has responded cautiously to digital asset-backed financial products, often citing market manipulation and investor protection concerns.
This is a big decision for the cryptocurrency market. Approval would lead the way for more institutions getting involved in Ethereum-based derivatives. Options would provide investors with more hedging instruments and enhance market liquidity.
SEC’s next move could shape crypto regulations
A rejection, however, would reinforce regulatory concern and signal additional resistance towards crypto-related financial products. The SEC has been in the public eye with regards to crypto-based investment products.
The agency approved multiple spot Bitcoin ETFs in the last few months, a shift from their earlier regulatory stance. Industry participants expect this trend to be applied to products that derive their underlying from Ethereum. But SEC Chair Gary Gensler has taken a cautious approach, emphasizing the need for robust investor protections.
Market participants, institutional investors, and crypto enthusiasts alike will be monitoring the SEC’s subsequent actions very keenly. The decision would set the tone for future regulatory guidelines and set a precedence for such filings.
