In Brief:
- Kelly Strategic Management has filed for Ethereum future ETF.
- The investment firm will invest in cash-settled ethereum futures contracts traded on CME.
The investment firm, Kelly filed a Form N-1A with the Securities and Exchange Commission (SEC) for approval in the U.S. of an exchange-traded fund (ETF) tied to Ethereum futures.
The N1-A is used by investment companies seeking to form open-ended mutual funds. In addition, to register a product under both the Securities Act of 1933 and the Investment Company Act of 1940.
The move came just three months after VanEck and ProShares suddenly withdrew their ETH futures ETF applications on the same day in August.
SEC Chair Gary Gensler said that he was interested in taking a closer look at proposed c crypto products under the ‘40 Act, specifically for those holding futures traded on the CME (Chicago Mercantile Exchange).
CME is currently the only commodity exchange where ether futures are traded. The position limits for ether futures contracts are 8,000 contracts for an applicable month, with each contract representing 50 ether. If Kelly fund exceeds those limits, it will invest in longer-dated ether contracts, as well as additional cash and fixed income investments like corporate debt securities or government bonds.
Last month, two bitcoin futures-based ETFs from ProShares and Valkyrie went public with the SEC’s approval after Chair Gary Gensle claimed the funds provided sufficient investor protections.
In contrast to that, Invesco aborted the release of a Bitcoin Futures alternate traded fund (ETF) within the US due to SEC’s rules. As SEC allows an ETF with 100% exposure to a bitcoin futures contract only, the approval might face some hurdles. Many firms are coming forward to release their ETF but are stuck in a tussle with the SEC’s rigid rules.
