SEC Delays Decision on Ethereum ETFs: Law Decoded

The United States Securities and Exchange Commission (SEC) has delayed its decision on BlackRock’s proposed Ethereum exchange-traded fund (ETF) application, stating that it needs more time to review the proposal. The final decision on BlackRock’s spot Ether ETF is expected to be made in May, similar to how the SEC decided on Bitcoin ETFs in January. The SEC has also delayed its decision on a spot Ether ETF from Grayscale Investments, allowing for public comments on the application. The SEC has been known for its anti-crypto stance, with a significant increase in enforcement cases related to digital assets in recent years.

In other news, the Financial Industry Regulatory Authority (FINRA) has reported that around 70% of crypto-related communications violated guidelines on public communications, containing misleading or false claims. FINRA reviewed over 500 crypto asset-related retail communications and found potential violations of its rules. These communications can range from podcasts to advertisements and may misrepresent the protections of federal securities laws for digital assets.

Binance.US, a cryptocurrency exchange, continues to face regulatory pressure in the US, with Florida and Alaska revoking its right to operate in their territories. This comes after Binance’s former CEO pleaded guilty to violating US Anti-Money Laundering rules. Binance.US has reached agreements with regulators in Arkansas, Illinois, and South Dakota to continue operating in those states, but the transfer of the former CEO’s voting rights must be irreversible.

Crypto lending firm Abra has settled with the Texas State Securities Board (TSSB), agreeing to return assets invested by Texas residents. Abra will wind down its US retail operations and allow clients to withdraw their assets within seven days. Unclaimed assets will be converted to fiat currency and directed to remaining Texas investors. Abra had held $13.6 million of crypto on behalf of over 12,000 US investors, with $1.8 million owned by Texas residents.

These developments reflect the ongoing regulatory challenges faced by the cryptocurrency industry in the US. The SEC’s delays and enforcement actions highlight its cautious approach to approving new investment vehicles, while FINRA’s findings highlight the need for better regulation and oversight of public communications in the crypto space. Binance.US’s struggles with state regulators and Abra’s settlement demonstrate the increasing scrutiny on crypto exchanges and lending platforms, with regulators taking action to protect investors.