Grayscale applies for new Ethereum futures ETF

Grayscale seeks new Ethereum futures ETF

Author: Helen LianGuairtz, Cointelegraph; Translation: Song Xue, LianGuai

Grayscale, a digital currency investment company, is the latest company to submit a new Ethereum futures exchange-traded fund (ETF) application to the U.S. Securities and Exchange Commission (SEC).

On September 19th, Grayscale proposed to list and trade the Grayscale Ethereum Futures Trust ETF based on the NYSE Arca Rule 8.200-E.

The proposal complies with the requirements of the Securities Exchange Act of 1934 and the rule changes submitted by the NYSE to the SEC. The ETF is managed by Grayscale Advisors, which is also referred to as the “sponsor” in the filing.

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The filing states, “The Sponsor is in the process of registering as a Commodity Pool Operator with the Commodity Futures Trading Commission and becoming a member of the National Futures Association.” It also notes that Grayscale Advisors has engaged Videnct Advisory as the sub-advisor to serve as the commodity trading advisor for the Trust.

The filing states that the Grayscale Ethereum Futures Trust Fund seeks to maintain its holdings of Ethereum futures contracts with “approximately constant expiration” and adds that it “will never hold a futures position until cash settlement.”

The filing shows that the nature of the Ethereum futures contracts in the ETF does not require the Trust to use an Ethereum custodian and adds:

“The Trust Fund will deposit an initial margin to initiate the open positions of the futures contracts. The margin deposit is similar to cash performance margin. It helps to ensure that traders fulfill their obligations to buy and sell futures contracts.”

A few weeks ago, digital asset management company Valkyrie also submitted an Ethereum futures ETF application to the SEC in mid-August, and several other companies have previously submitted ETH futures ETF applications. On August 17th, Bloomberg reported that the SEC will allow the launch of the first batch of ETFs based on Ethereum futures, which has sparked optimism in the Ethereum market.

Last month, Grayscale achieved a significant but partial victory in its battle with the SEC when it converted its over-the-counter traded Grayscale Bitcoin Trust Fund (GBTC) into a listed spot Bitcoin ETF. The SEC rejected its GBTC application, and Grayscale subsequently filed a lawsuit. The appellate court ordered approval of Grayscale’s request for review and vacated the SEC’s order denying the listing of GBTC. While the ultimate listing of the Grayscale spot Bitcoin ETF is not guaranteed, this victory was still warmly welcomed by the community.

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