Justin Sun says cryptocurrency education needs to be strengthened, Ethereum ETF will not pass

He added that the U.S. Securities and Exchange Commission (SEC) will not be giving the nod to any Ethereum exchange-traded fund (ETF) in May.

In an April 28 post on Twitter, Sun pointed out that the cryptocurrency industry still has to prepare long-term education for regulators, especially in helping them understand how the nascent industry operates.

"My honest opinion is that an Ethereum ETF isn't going to get approved in May. The crypto industry still has a lot more work to do to get ready for long-term education with regulators and helping them understand crypto.".

That's the point Sun is taking, like many market commentators expecting the SEC to shoot down the pending Ethereum ETF applications.

For example, in May, Bloomberg ETF analyst Eric Balchunas had placed chances of the SEC giving the nod to a spot Ethereum ETF at 25%. This was because of the doubts the SEC commissioners had shown at that time and even during the Bitcoin ETF era.

Speculations have also emerged suggesting that the Gary Gensler-led agency has initiated efforts to classify ETH as security, thus, also prompting the Consensys lawsuit against the Commission.

Feedback from those recent meetings with the SEC is, let's say, discouraging, with approval prospects looking grim.

These revelations have dwindled the likelihood of an Ethereum ETF approval to 11%—its lowest level this year, according to Polymarket data.

However, there is a glimmer of hope on the horizon, since BlackRock and Grayscale, who have applied to list ETFs, are still updating their applications amid this silence and expectation of rejection.

Notably, the spot Ethereum ETF of asset management firm Franklin Templeton appeared on the website of the Depository Trust and Clearing Corporation (DTCC), despite the fact that its decision on the ETF application was pushed by the SEC on April 23.

According to Craig Salm, the Chief Legal Officer at Grayscale, the prospects of such products always remain a deal breaker with the US SEC's unwillingness to engage the spot Ethereum ETF applicants. "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," said Salm.