Ethereum ETF Applicants Omit Stakes from SEC Filing
Five U.S. asset managers with plans to launch an ETH ETF have amended their 19b-4 filings with the SEC.
As the U.S. Securities and Exchange Commission (SEC) considers applications for Ethereum ETFs – with analysts expecting approval this week – amended filings from several asset managers have removed their language on stakes.
The amendments were filed by Fidelity, VanEck, Invesco and Galaxy, Ark 21Shares and Franklin Templeton, according to multiple filings.
All five filings were made in a 25-minute period between 9:35 p.m. and 10:00 p.m. UTC on May 21, according to Bloomberg ETF analyst James Seyffart, whose post on X reads as follows:
“UPDATE: It’s happening. We have at least 5 of the potential #Ethereum ETF issuers that have submitted their Amended 19b-4’s in the last ~25 min. Fidelity, VanEck, Invesco/Galaxy, Ark/21Shares, & Franklin all submitted via CBOE.”
Seyffart reiterated that approved 19b-4 filings must be accompanied by signed S-1 registration statements for Spot Ether ETFs to launch.
“There is still a potentially long road to launch. But these filings prove that all the rumors, speculation and talk have been accurate,” he added.
What Staking Refers to
Staking refers to the process by which users delegate Ethereum tokens to the network in exchange for rewards. It became a central component of Ethereum’s security model, with the network’s planned transition to a proof-of-stake consensus model in 2022.
Fidelity removed the conditions for staking customer funds in its proposed ETF, filing an amended application on Tuesday. The move mirrors a similar move by Ark Invest/21 Shares, which earlier this month removed mentions of staking from its filing, which the SEC is expected to rule on this week.
“Spot Ethereum ETF applicants have kowtowed by removing staking language to appease a recently humiliated SEC,” Mark Connors, head of research at 3iQ, told Decrypt. “We view the removal of the staking language as a temporary concession.”
Possible Scenario Should Approval Be Granted
If Ethereum spot ETFs get the regulatory green light, it could mean that a significant portion of Ethereum’s supply is sitting idle in approved funds. As of this writing, about 27% of the Ethereum supply, or 32 million ETH, is staked, according to a Dune dashboard.
SEC Chairman Gary Gensler spoke specifically about staking services in an agency video a year ago, arguing that investors deserve certain disclosures about how cryptocurrencies are handled by companies when staked, as if the funds were commingled.
In other regions, such as Canada, funds staking Ethereum have shown that it can be done. For example, two of 3iQ’s exchange-traded products began offering clients the benefits of staking Ethereum in 2023.
Industry experts believe the regulator will make a decision on all or most of the applicants, similar to how it handled spot bitcoin ETFs. BlackRock and Hashdex are the other two spot Ether ETF applicants seeking SEC approval. This comes as the SEC reportedly began asking applicants to expedite their 19b-4 filings on May 20.
The sudden change prompted Seyffart and his colleague, fellow Bloomberg ETF analyst Eric Balchunas, to raise their approval odds for spot Ether ETFs from 25% to 75%.
By Audy Castaneda