The US Securities and Exchange Commission (SEC) has once again delayed approving Ethereum exchange-traded funds (ETFs) from financial heavyweights BlackRock and Fidelity.

The SEC announced its delay on Monday. This postponement signifies the regulatory body’s careful stance towards the fast-evolving cryptocurrency sector.

Deadlines for Final Decisions on Ethereum ETFs

Despite the excitement over recently approved Bitcoin ETFs, the SEC’s cautious approach towards Ethereum ETFs sheds light on the intricate regulatory environment. Moreover, the SEC has voiced concerns regarding Ethereum’s proof-of-stake mechanism. Consequently, it seeks public feedback to gauge whether this model heightens the risk of fraud and manipulation in the Ethereum market.

This isn’t the first time the SEC has put off its decision. A similar delay occurred in January, right after the green light was given to a series of spot Bitcoin ETFs. The regulatory body is permitted up to three delays while it analyzes the offerings and gathers feedback.

Experts and market analysts had predicted the SEC’s wary approach, suggesting that a definitive decision might only emerge by May 23. This is the final deadline for its verdict on VanEck’s Ethereum ETF.

Despite the regulatory uncertainty, Ethereum’s market value has shown resilience, indicating a 7% increase in the past 24 hours.

Read more: Ethereum (ETH) Price Prediction 2024/2025/2030

At the heart of the hesitation to approve Ethereum ETFs is Ether’s legal classification. The approval of Bitcoin ETFs was predicated on classifying Bitcoin as a commodity. The assumption that Ethereum is treated similarly is now under rigorous examination.

The SEC’s ultimate determination on whether Ethereum is a commodity or a security will crucially influence the fate of the ETF applications and, potentially, the wider cryptocurrency ecosystem. Moreover, concerns about market manipulation and the correlation between Ethereum’s spot and futures markets highlight the need for stringent safeguards to maintain market integrity.

Read more: How to Buy Ethereum (ETH) and Everything You Need to Know

The industry, represented by entities like crypto asset manager Bitwise, advocates a thoughtful approach. They emphasize the importance of meeting regulatory standards and directly addressing the SEC’s apprehensions.

“We want to file for a product that’s going to ultimately be accepted and not just throw pasta up at the wall. We’d like to have that open dialogue so that we’re taking into account concerns that they might have,” Katherine Dowling, Bitwise’s general counsel said.