SEC has once again deferred its decision regarding the approval of the Invesco Galaxy Ethereum ETF, marking another postponement following a similar delay in December. The SEC announced its decision to initiate proceedings due to the complex legal and policy questions presented by the proposed ETF.

This delay mirrors the SEC's actions with other Ethereum-based ETF proposals, including a recent one from Grayscale Investments. The SEC's inquiries for Invesco Galaxy revolve around Ethereum's transition to a proof-of-stake mechanism and concerns over potential fraud and manipulation risks due to the concentration of control among a limited number of individuals or entities.

The SEC has set a 21-day period for public comments on the Invesco Galaxy Ethereum ETF, followed by a 35-day period for rebuttals.

The future of spot Ethereum ETFs remains uncertain, with speculation about their approval varying widely among analysts. Investment bank TD Cowen predicts approval could come as late as late 2025 or early 2026, whereas other industry observers anticipate a decision by May 2023. Despite recent approvals of spot Bitcoin ETFs, SEC Chair Gary Gensler cautioned that these approvals are specific to Bitcoin and should not be interpreted as indicative of the SEC's stance on other cryptocurrencies.