FRANKLIN TEMPLETON LISTS ETHEREUM SPOT ETF ON DTCC

Asset management heavyweight Franklin Templeton has launched a new product called the Franklin Ethereum Ethereum ETF, officially coded EZET. This Ethereum Spot ETF debuted on his website for the Depository Trust and Clearing Corporation (DTCC), a key platform for processing securities transactions across the United States.

DTCC’s listing indicates that the ETF is ready for creation and redemption, which is an important feature for these funds. This means investors can enter or close positions based on market demand. This flexibility helps keep the ETF’s price closely aligned with the actual value of Ethereum that the ETF represents.

Understanding SEC involvement

Although the ETF has been listed, this does not mean that the Securities and Exchange Commission (SEC) has finally given its nod. Although the DTCC has a long list of securities for trading and settlement, SEC approval focuses on strict regulatory standards and is an entirely different ball game.

Before this, on February 12, Franklin Templeton filed an S-1 filing with the SEC regarding this Spot Ether ETF, clarifying its intentions. If approved by the SEC, the ETF will be listed on the Chicago Options Exchange under the name Franklin Ethereum ETF.

However, on April 23, the SEC deferred its decision and extended the deadline for further review of the application to June 11. This extension would give the SEC additional time to consider proposed rule changes for trading these stocks on the Cboe BZX exchange.

Industry expectations and challenges

The outlook for Ethereum ETF is not very bright. A recent meeting between ETF issuers and the SEC left companies like VanEck and ARK Investment Management, along with seven others, somewhat disappointed. They filed with the SEC hoping to directly track Ethereum’s spot price.

In any case, the feedback from the SEC is not encouraging and suggests that these applications may be denied. In contrast to the more open discussions that led to Bitcoin‘s approval, current talks are more one-sided, with no key details shared by the SEC.

This change in the intensity of the dialogue comes under the leadership of Gary Gensler, who is known for his critical stance on cryptocurrencies and comes amid growing concerns about market manipulation, which has previously excluded spot Bitcoin ETFs for more than a decade. There is.

Industry-wide sentiment captured by VettaFi’s Todd Rosenbluth suggests an uncertain regulatory future, with approvals likely to be delayed until late 2024 or beyond. Despite the looming possibility of a denial, the companies remain engaged and plan to submit additional documentation to continue their dialogue with the SEC.

Market impact and future outlook

The market is reacting with a mixture of expectations and hesitation. Ether’s price has risen this year, but it is still overshadowed by Bitcoin’s strong ​​performance. Industry voices like OKX’s Hong Fang point out that expectations for a thumbs-down from regulators are constraining Ether’s price appreciation and creating a cautious atmosphere among investors.

On another front, the SEC’s ongoing discussions, including last month’s high-profile discussion with Coinbase over Grayscale’s application to turn its Ethereum trust into an ETF, highlight a complex regulatory landscape. These talks hinge on whether the oversight mechanisms in place for the Bitcoin futures ETF approved in 2021 are sufficient to monitor the Spot Ether ETF.

As the discussion progresses, some experts, such as Matt Hogan of Bitwise Asset Management, believe that the SEC’s hesitation may be due to a need for more data on Ether market trends. There is. If the SEC ultimately decides against the Ether ETF, a legal challenge is likely, and industry players are prepared to defend their interests in court.