Ether Tumbles 6% as ETH ETF Hopes Dim Amid Regulatory Probe Reports

CoinDeskPolicyОпубліковано о 2024-03-19Востаннє оновлено о 2024-03-20

Анотація

CoinDesk reported Wednesday that the Ethereum Foundation faces a confidential inquiry, and Fortune said the SEC is examining whether ETH is a security.

Ether dropped to near $3,200 and other cryptos turned lower as the regulatory headwind weighed on the market.
Ether-based spot ETFs likely won't get approved by the SEC in May, Bloomberg analysts said Tuesday.

Ethereum's ether (ETH) tumbled as much as 6% Wednesday amid concern much-hoped-for ETH exchange-traded funds face a roadblock to U.S. approval.

CoinDesk reported earlier in the day that the Ethereum Foundation, the non-profit organization that helps develop the blockchain behind the second-largest cryptocurrency, faces a confidential inquiry from an unnamed government. Not long after, Fortune said the U.S. Securities and Exchange Commission is waging a campaign to classify the Ethereum blockchain's native token as a security, beginning a probe after Ethereum moved to a proof-of-stake network in 2022.

In the aftermath, ETH dropped to $3,200. Bitcoin (BTC), the largest cryptocurrency, dropped to around $62,000 after bouncing to near $64,000 earlier. The broad-market CoinDesk 20 Index (CD20) fell 3%.

Designating ETH as a security could complicate efforts to create ether ETFs in the U.S. The SEC has a May deadline to decide on approval. An analyst at Bloomberg Intelligence on Tuesday said he doesn't expect such a fund to get approved by May, given the regulator's lack of engagement with potential issuers – a contrast to the active conversations around spot bitcoin ETFs before they got the green light in January.

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Earlier Wednesday, the SEC delayed its decision on VanEck’s proposed ether ETF.

Edited by Sheldon Reback and Nick Baker.

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