SEC approved Grayscale and ProShares ether ETP listing rules

The U.S. Securities and Exchange Commission on July 17, 2024 approved NYSE Arca rule changes to list and trade shares of the Grayscale Ethereum Mini Trust and the ProShares Ethereum ETF. Both proposed products would hold spot ether; the ProShares vehicle could also hold cash.

The order added two proposals to the regulated U.S. spot-ether product pipeline and was consequential because each arrived after the SEC’s broader May 23, 2024 approval of exchange rules for eight other ether-based products. It did not, by itself, make either registration statement effective or start trading. The distinction between exchange-rule approval and securities-registration effectiveness was still decisive on July 17.

What the SEC decided

SEC Release No. 34-100541 approved files SR-NYSEARCA-2024-44 and SR-NYSEARCA-2024-53 under NYSE Arca Rule 8.201-E for Commodity-Based Trust Shares. The Commission said the proposals were consistent with Exchange Act provisions requiring exchange rules to deter fraud and manipulation, protect investors and support the availability of market information. The SEC received no comments on either filing.

The Commission largely carried forward the surveillance analysis from its May 23 spot-ether order. That earlier analysis compared returns in Chicago Mercantile Exchange ether futures with a sample of spot-ether markets from October 1, 2021 through March 29, 2024, using hourly, five-minute and one-minute intervals. The July 17 order said the two new structures were substantially similar to the earlier proposals and concluded that NYSE Arca’s surveillance-sharing agreement with CME could assist in detecting manipulation.

That was a regulatory finding about the proposed exchange rules and a specified historical correlation study. It was not a finding that spot ether could not be manipulated, and it did not measure a July 17 market reaction.

Two products, different designs

NYSE Arca’s Grayscale filing described a Delaware statutory trust expected to trade under the ticker ETH. Its assets would consist solely of ether, with each share representing a proportional interest after expenses and liabilities. The proposed valuation reference was the CoinDesk Ether Price Index calculated at 4:00 p.m. New York time on each business day. Coinbase Custody Trust Company was identified as custodian, while BNY Mellon Asset Servicing was named administrator and transfer agent.

The filing also said neither the trust nor associated parties would stake its ether or use it to earn additional ether or income. As of the July 17 decision, the Grayscale registration statement was not effective, so the shares could not yet trade merely because the exchange proposal had been approved.

The ProShares filing described a separate Delaware statutory trust series sponsored by ProShare Capital Management. Its objective was to reflect ether’s performance as measured by the Bloomberg Ethereum Index, less expenses and liabilities; that index’s closing level was calculated at 4:00 p.m. Eastern each day. The proposed fund could hold ether and cash, would use cash creations and redemptions, would not use derivatives, and would not stake its ether. Coinbase Custody was identified for ether and BNY Mellon for cash custody and administration. Its registration statement was also not effective in the record considered by the SEC.

Why the July 17 step mattered

The approval showed that the SEC was willing to apply the May surveillance framework to additional spot-ether products whose structures tracked the approved pattern. That made the pathway more repeatable for exchanges and sponsors, while leaving product-level disclosures, registration effectiveness, listing compliance and launch timing as separate gates.

For investors, the proposed shares were securities-market exposure to ether, not ether itself. Shareholders would not control private keys, pay Ethereum transaction fees through the shares or use them in applications. Expenses, share prices and operational mechanics could also produce results different from direct token ownership.

No price, return, volume or fund-flow claim is made for July 17. Crypto trades continuously across venues, and the regulatory documents do not isolate the order’s effect on ether. The verified event was narrower: NYSE Arca won approval for two more proposed spot-ether listings, while the documents necessary for actual trading remained incomplete on the event-date record.