Hashdex withdraws spot Ether ETF application

Investment manager Hashdex has withdrawn its application for a spot Ether exchange-traded fund (ETF), according to documents filed with the United States Securities and Exchange Commission (SEC). 

A filing from May 28 reveals that Hashdex pulled its application for a proposed rule change that would allow the debut of its Hashdex Nasdaq Ethereum ETF. The proposal was taken down on May 24, just a day after eight similar financial products were approved by the financial watchdog.

There are no details on the reasons for the move or whether Hashdex will resubmit its proposal. Cointelegraph reached out to Hashdex but did not receive an immediate response.

Hashdex’s notice of withdrawal. Source: U.S. SEC

On May 23, the SEC approved the 19b-4 filings from VanEck, BlackRock, Fidelity, Grayscale, Franklin Templeton, ARK 21Shares, Invesco Galaxy, and Bitwise—clearing the way for spot Ether ETFs to be listed and traded on their respective exchanges. The funds are expected to launch in June. 

Unlike other applicants, Hashdex’s application for a spot Ether ETF combined spot Ether holdings with Ether futures contracts on the same product, seeking to mitigate potential manipulation.

Other applicants, such as Fidelity, ARK 21Shares, and Franklin Templeton, have focused on purely spot-based Ether ETFs with late amendments to their filings, such as removing support for Ether (ETH) staking in response to SEC feedback.

In addition, Hashdex’s ETF sought to mirror daily fluctuations in the Nasdaq Ether Reference Price to address regulatory concerns about market manipulation. According to its initial filing from September 2023:

“Instead of holding 100% spot Ether, which could make it more susceptible to price manipulation in the spot market, the Fund will hold a mix of Spot Ether, Ether Futures Contracts, and cash.”

Hashdex is among the issuers of spot Bitcoin ETFs approved in January. Similarly, the company’s BTC fund used an alternative strategy from other asset managers. For instance, Hashdex’s Bitcoin ETF did not depend on the Coinbase surveillance sharing agreement, opting instead to source spot BTC from physical exchanges within the CME market.

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