Grayscale Investments, a leading crypto asset manager, has filed an amended registration statement for its proposed spot Ethereum fund, marking a significant milestone in its journey to launch the product. The updated filing, submitted on Thursday, includes new language that sheds light on the treatment of ether and the amount of the cryptocurrency held by the trust.

According to the filing, as of May 28, 2024, approximately 0.94552590 ether is required to create a basket of 100 shares, while 94.552590 ether would be needed to create a basket of 10,000 shares. This information provides valuable insight into the inner workings of the proposed fund and how it will operate.

The amended registration statement comes hot on the heels of BlackRock's filing of its amended S-1 statement and the U.S. Securities and Exchange Commission's (SEC) approval of 19b-4 forms for eight Ethereum exchange-traded funds (ETFs) last week. The SEC has asked issuers to submit their draft registration statements by Friday, sources told The Block, indicating that more filings are expected in the coming days.

Trading of the ETFs will not commence until the registration statements become effective, but the flurry of activity suggests that the launch of spot Ethereum funds is imminent. Grayscale's move to convert its Ethereum trust to a spot ether ETF in October last year was a significant development, and the latest filing brings the company one step closer to realizing its goal.

The Grayscale Ethereum trust, launched in March 2019, is the largest ETH investment vehicle in the world, holding approximately 2.5% of ether in circulation as of March 31. The trust's size and scale make it a significant player in the Ethereum market, and its conversion to a spot ETF is expected to have a profound impact on the cryptocurrency landscape.

In the wake of the SEC's approval of spot Ethereum ETFs, some industry insiders have questioned whether ether would still be considered a security and fall under the SEC's jurisdiction. Coinbase Chief Legal Officer Paul Grewal has argued that ether is no longer a security, but Grayscale's latest filing takes a more nuanced approach. According to the filing, "Other U.S. and state agencies, such as the SEC, have not made official pronouncements or issued guidance or rules regarding the treatment of Ether, although the SEC, by action through delegated authority approving exchange rule filings to list shares of trusts holding Ether as commodity-based exchange-traded products, has implicitly taken the view that Ether is a commodity."

This statement suggests that Grayscale believes ether is likely to be treated as a commodity, rather than a security, but the company is taking a cautious approach by acknowledging the lack of official guidance from the SEC and other regulatory agencies. As the launch of spot Ethereum funds draws near, the treatment of ether will be a key issue to watch, and Grayscale's filing provides valuable insight into the company's thinking on this critical matter.