SEC again delays decision on spot Ethereum ETF options

The U.S. Securities and Exchange Commission has delayed its decision on whether to approve options on spot Ethereum exchange-traded funds for the second time.

In a filing on Friday, the SEC said it delayed its decision to allow for more analysis and public input, particularly regarding whether the proposed rule change aligns with requirements under the Securities Exchange Act. The SEC highlighted concerns about the proposal’s potential impact on preventing market manipulation, protecting investors and ensuring a fair trading system, which falls under Section 6(b)(5) of the Act.

On Aug. 7, NYSE American LLC, Grayscale and Bitwise proposed a rule change to list and trade options on three products — the Bitwise Ethereum ETF, the Grayscale Ethereum Trust and the Grayscale Ethereum Mini Trust — as well as "any trust that holds ether." 

The delay also includes consideration of whether BlackRock's iShares Ethereum Trust (ETHA), a spot bitcoin ETF, can list and trade options. In late September, the agency set Nov. 10 as the deadline to decide on rule changes related to the Bitwise and BlackRock spot Ethereum ETFs, with ETHA addressed in another SEC filing on Friday.

By opening proceedings, the SEC aims to assess if the exchange has provided sufficient evidence that the proposed ether ETFs would meet regulatory standards without posing additional risks to investors or market stability.

Earlier this year, the SEC approved eight Ethereum ETFs, which began trading on July 23. 

The funds reported $79.74 million net inflows on Thursday with $466.39 million in trading volume, which exceeded the usual daily volume between the $100 million and $200 million range.