Reuters has reported that the US Securities and Exchange Commission (SEC) has requested Nasdaq and Cboe to revise their spot Ethereum exchange-traded fund (ETF) proposals.

This request signifies an important step in the regulatory review process for these financial products.

According to Reuters, sources familiar with the matter revealed that the SEC asked Nasdaq and Cboe to “fine-tune” their ETF filings. This request is considered a crucial precursor to potential approval. The SEC’s detailed scrutiny of these proposals highlights its commitment to ensuring regulatory standards for new financial instruments.

Nine firms have applied to list spot Ethereum ETFs, including industry heavyweights like Grayscale, Vaneck, 21Shares, Ark Invest, Hashdex, Invesco, Galaxy, Fidelity, BlackRock, Franklin Templeton, and Bitwise. Each firm is awaiting the SEC’s decision.

Following the news from Reuters, market speculation has intensified. Bloomberg ETF analysts, including James Seyffart, have adjusted the approval probability from 25% to 75%. Standard Chartered, a financial institution managing over $800 billion in assets, has predicted an 80-90% chance.

Seyffart also observed that Grayscale has recently filed an updated 19b-4 for their Ethereum Mini Trust, indicating a surge in activity around ETF proposals. He clarified that this filing is an initial 19b-4 for Grayscale’s mini Ethereum trust.

“I don’t think this will be included in the first wave of potential approvals,” Seyffart commented.

As the big date approaches, Fidelity Investments has significantly adjusted its spot Ethereum ETF proposal. The latest S-1 filing with the SEC indicates that the staking feature has been removed. This move reflects a strategic shift in response to regulatory uncertainties.

Alex Thorn, head of research at Galaxy Digital, speculated on the SEC’s potential approach. He suggested that the SEC might differentiate between Ethereum and staked Ethereum in their regulatory framework.

Read more: Ethereum ETF Explained: What It Is and How It Works

“If the speculation about a 180 from SEC on the Ethereum ETFs is true, I would guess they try to thread a needle between ‘ETH’ not being a security and ‘staked ETH’ as being a security. That would allow SEC to approve Ethereum ETFs while maintaining their previously stated opinions,” said Thorn.

The detailed review process by the SEC, combined with strategic adjustments by firms like Fidelity, indicates a thorough and cautious approach to introducing these financial products.

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