SEC delays Ethereum ETF options decision

The U.S. Securities and Exchange Commission (SEC) will hold off deciding on a planned rule change by Nasdaq’s International Securities Exchange (ISE) which would enable the listing and trading of options via BlackRock’s iShares Ethereum Trust (ETHA).

The SEC – which regulates the securities markets in the U.S.A. – was widely anticipated to make its decision this week. Still, that decision has now been delayed to November 10 according to a statement by the authority on Tuesday (Sep, 24).

“The Commission finds it appropriate to designate a longer period within which to take action on the proposed rule change so that it has sufficient time to consider the proposed rule change,” the SEC wrote.

Markets have been awaiting the decision as it would be another step towards crypto’s integration with traditional finance. If given the green light, these Ethereum-based options would be subject to the same rules and oversight as other ETF-related derivative products and provide investors with new avenues to gain exposure to Ethereum’s price fluctuations.

The Securities Exchange Act’s Section 19(b)(2) permits the regulatory body to extend its decision-making period by up to 90 days. This is justified as allowing for a more comprehensive assessment of potential market impacts and associated risks.

This week the SEC approved the Nasdaq ISE to list and trade options on BlackRock’s iShares Bitcoin Trust (IBIT) following months of deliberation.

Among professional traders and crypto specialists, the news was greeted with excitement and described as “game-changing”. Bitcoin index options provide established investors and market participants with a familiar method to adjust their stake in the leading cryptocurrency.

Securing SEC approval is no mean feat. Nasdaq ISE made multiple revisions to its initial proposal and had to assuage the body’s concerns about market manipulation and high-risk exposure for participants. A critical modification in the submission caps IBIT options at 25,000 contracts. The exchange characterized this limit as “highly cautious” considering the market’s scale and the trust’s liquidity levels.

Featured image: Midjourney

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