Grayscale withdraws ETH ETF application

A few weeks before the deadline for the spot ETF application, Grayscale pulls up its application for a futures ETF Ether in.

Surprise: Just a few weeks before the SEC must make a final decision on Grayscale's Ether spot ETF application, the crypto giant is withdrawing its application for an Ether futures ETF.

This is evident from a message submitted with the U.S. Securities and Exchange Commission (SEC) and published yesterday, May 7.

Bloomberg analyst James Seyffart is surprised by the withdrawal. On the short message platform X, formerly Twitter, he wrote: "I don't know why they did this. In my opinion, they should have waited for the SEC's decision and proceeded from there." He added, however, that there may have been conversations between Grayscale and the regulator that led the company to make the move.

According to Seyffart, Grayscale's ether futures ETF application was a "Trojan horse" that, if approved, would have triggered a lawsuit against the SEC if the SEC subsequently rejected the spot ETF application.

Just recently, the SEC postponed its decision on ETF spot applications from Grayscale and Franklin Templeton out. The agency said it needed more time to review the application for regulatory requirements, particularly compliance with the Securities Exchange Act.

The SEC must make a final decision on June 23 (Grayscale) and June 11 (Franklin Templeton).

At the time of writing, Ether (ETH) has dropped below the psychologically important USD 3,000 mark and is currently trading at USD 2,996, 3.75 percent lower than a day ago. Whether the withdrawal of the ETF by Grayscale caused this drop can only be surmised.