Hashdex, an investment manager, has withdrawn its proposal for a spot Ether exchange-traded fund (ETF). A document submitted to the United States Securities and Exchange Commission (SEC) on May 28 shows that the proposed rule change to allow the introduction of the Hashdex Nasdaq Ethereum ETF has been withdrawn.
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The change occurred on May 24, a day after the company received the green light from the SEC to launch eight similar financial products.
The reasons for Hashdex’s withdrawal remain unclear and equally, the company has not expressed any intention of resubmitting the proposal. A source close to the investment manager said that Hashdex “no longer plans to bring a single asset Ether ETF to the market. ”
SEC Approves Spot Ether ETFs for Major Firms
Some major firms received approval for their 19b-4 filings on May 23. These include VanEck, BlackRock, Fidelity, Grayscale, Franklin Templeton, ARK 21Shares, Invesco Galaxy, and Bitwise.
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These approvals will allow these companies to list and trade spot Ether ETFs, with launches expected in June. Unlike Hashdex’s combined approach, these applicants focused on purely spot-based Ether ETFs. Late amendments to their filings, such as removing support for ETH staking, were made in response to SEC feedback.
When Hashdex applied for a place for Ether ETF, the firm proposed a different model incorporating physical Ether and Ether Futures contracts. The fund intended to tackle issues of market manipulation as it autonomously followed the same Nasdaq Ether Reference Price movements daily. The initial filing submitted in September 2023 included the intention of holding spot Ether, Ether futures contracts, and cash only. This was meant to help deter manipulation of the spot prices in the market.
Nasdaq Files Proposal Managed by Toroso Investments
The Nasdaq stock exchange filed the proposal with the SEC in September 2023 to list the Hashdex Nasdaq Ethereum ETF. Also, the fund was managed by Toroso Investments, which is registered as a commodity pool operator with the Commodity Futures Trading Commission and a member of the National Futures Association. Over recent months, the proposal received public comments from lawmakers. Democratic Senators Laphonza Butler and Jack Reed urged the SEC not to approve spot Ethereum ETFs. Conversely, Representatives French Hill, Tom Emmer, and Josh Gottheimer supported the approval of these funds.
Further Actions for Other Ether ETFs
Specifically for the approved spot Ether ETFs, issuers’ S-1 registration statement must be effective to start trading. The SEC has now commenced dialogue with issuers regarding their S-1 form, although the length of this process is unknown. Analysts speculate it could take weeks before the funds begin trading.
Cryptopolitan reporting by Damilola Lawrence
