The U.S. Securities and Exchange Commission (SEC) has initiated additional proceedings regarding three proposed crypto exchange-traded funds (ETFs), effectively delaying their approval, as announced in notices published on Dec. 18. These proceedings concern NYSE Arca’s proposed rule change for Grayscale’s Ethereum Futures Trust ETF and Nasdaq’s proposal for Hashdex’s spot Ethereum ETF.

Initially, on Nov. 15, the SEC extended its review period for these proposals, and now, with the new proceedings, the decision on each ETF is postponed further. According to the notices, stakeholders must submit initial and rebuttal comments within 21 and 35 days, respectively, after the notices’ publication in the federal register, indicating a decision is at least 35 days away.

SEC asks about Ethereum features and more

In both filings, the SEC asked whether Ethereum’s unique features, including proof-of-stake consensus, raise concerns regarding manipulation and fraud not seen in Bitcoin futures ETFs. The agency asked more broadly about vulnerability to fraud and manipulation and each ETF proposal’s ability to reduce this risk.

Regarding Grayscale’s application, the SEC specifically asked whether the proposed fund should gain approval if and when several competing funds begin trading, assuming that each of those funds provides identical exposure.

On the Hashdex proposal, the SEC asked several questions about the Ethereum spot market. Those questions concerned matters such as liquidity, futures-based spot pricing, correlations between spot and CME Ethereum futures markets, and whether relevant regulated markets are significant.

Pando’s ETF

Finally, the SEC published a notice soliciting comments on a proposed rule change from Cboe BZX concerning a spot Bitcoin ETF from Pando Asset AG.

This notice provides substantial background information similar to other previous notices on spot Bitcoin ETFs. However, it does not seek out answers to specific questions, unlike the two Ethereum ETF notices described above.

Pando Asset AG applied for its spot Bitcoin ETF on Nov. 29. As such, the SEC’s current filing is an early notice that does not yet delay proceedings. Instead, it says that the SEC must approve, disapprove, or institute additional proceedings within 45 days of publication in the federal register or within a longer period of 90 days. It does not provide exact deadlines.