Galaxy’s Alex Thorn says approval of spot Ethereum ETF in May is “extremely unlikely”

The approval of a spot Ethereum exchange-traded fund (ETF) in May now looks “extremely unlikely,” according to Alex Thorn, head of corporate research at Galaxy Digital. Recent reports that the Securities and Exchange Commission (SEC) has issued subpoenas to crypto companies with ties to the Ethereum Foundation, coupled with the SEC’s lack of active engagement with ETF applicants two months before the first deadline, are adding to the Casting doubt over the likelihood of approval in May, Thorn wrote in a note Friday. Fortune reported this week that the SEC is “actively pursuing legal action” to classify ETH as a security, citing U.S. companies that have received subpoenas related to the investigation. Meanwhile, Thorn, a former Fidelity Investments veteran, suggested that if the SEC is seeking information about crypto companies’ interactions with the Ethereum Foundation, it may be considering whether the 2014 Ethereum initial coin offering (ICO) was an Unregistered securities issuances, rather than just classifying current secondary transactions of ETH as securities transactions. He speculated that while the SEC may draw a distinction between ICOs and current secondary trading of ETH, any enforcement action against the Ethereum Foundation after nearly a decade would be “extremely unusual.”