Tron blockchain founder Justin Sun says the US Securities and Exchange Commission (SEC) would not approve an Ethereum exchange-traded fund (ETF) in May.
In an April 28 post on X (formerly Twitter), Sun noted that the crypto industry still needs to prepare for a long-term education with regulators, especially in helping them understand how the emerging industry operates.
“My honest opinion (NFA) is that an Ethereum ETF won’t be approved in May. The crypto industry still needs to prepare for a long-term education with regulators, focusing on helping them understand crypto,” Sun said.
Sun’s stance echoes the sentiments of numerous market analysts anticipating the SEC dismissing the pending Ethereum ETF applications.
For instance, Bloomberg ETF analyst Eric Balchunas placed the chances of the SEC greenlighting a spot Ethereum ETF in May at 25%. He attributed this skepticism to the SEC’s less active involvement in the application process than the Bitcoin ETF period.
Also, recent speculations suggest the Gary Gensler-led agency has initiated efforts to classify ETH as security, prompting the Consensys lawsuit against the Commission.
Additionally, feedback from recent meetings with the SEC indicates a pessimistic outlook, with approval prospects appearing bleak.
These revelations have dwindled the likelihood of an Ethereum ETF approval to 11%, its lowest level this year, as indicated by Polymarket data.
Nevertheless, some optimism persists as ETF issuers like BlackRock and Grayscale continue to update their applications despite the silence and expectation of rejection.
Notably, asset management firm Franklin Templeton’s spot Ethereum ETF appeared on the Depository Trust and Clearing Corporation (DTCC) website despite the SEC deferring its decision on the ETF application on April 23.
Craig Salm, Grayscale’s Chief Legal Officer, said the US SEC’s lack of engagement with spot Ethereum ETF applicants wouldn’t be a decisive factor hindering the prospects of such products.
“Investors want and deserve access to Ethereum in the form of a spot Ethereum ETF and we believe the case is just as strong as it was for spot Bitcoin ETFs,” Salm said.
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