11 May

This adjustment comes after the Securities and Exchange Commission (SEC) expressed apprehensions regarding staking, viewing it as a security, which prompted the revision.

Amended Ark 21Shares Ethereum ETF Proposal: PoS Exclusion Raises Regulatory Concerns 

Initially, ARK Invest and 21Shares included staking options for the ARK 21Shares Ethereum ETF in their filing documents. However, the latest amendment removed this feature. Analysts have revised their expectations for SEC approval, with one reducing the likelihood from 70% to 25%.

The SEC's classification of staking as a security has dampened hopes for the approval of a spot Ethereum ETF. The inclination of SEC Chairman Gary Gensler to consider ETH as a security adds further uncertainty. Although the SEC is expected to make a decision on the Ethereum ETF proposals by May 23, industry experts anticipate rejection.

The ARK 21Shares Ethereum ETF, filed in September 2023, aims to offer investors direct exposure to ether on the Cboe BZX Exchange, using the CME CF Ether-Dollar Reference Rate. 21Shares serves as the trust sponsor, with Delaware Trust Company as the trustee and Coinbase Custody Trust Company as the ether custodian. ARK Investment Management oversees the fund.

Industry Insiders Forecast SEC Will Deny Proposals for Ethereum ETFs

Although the updated filings suggest ongoing discussions between the SEC and ETF applicants, the motivations behind the changes remain undisclosed. The revised approach reflects a strategic shift aimed at improving compliance with SEC regulations.

ARK Invest and 21Shares have refrained from providing comments on the amendments. However, the changing regulatory environment concerning Ethereum and staking poses obstacles for ETF approval, tempering the optimism previously held by industry analysts. 

May 2024, Cryptoniteuae

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