In a recent filing, Hashdex announced the withdrawal of its proposal to list and trade shares of the Hashdex Nasdaq Ethereum exchange-traded fund (ETF). The notice of withdrawal, posted by Nasdaq on Tuesday, comes shortly after the U.S. Securities and Exchange Commission (SEC) approved 19b-4 forms for eight other Ethereum ETFs, excluding Hashdex.

The filing indicates that "on May 24, 2024, the Exchange withdrew the proposed rule change." Initially filed in September, Nasdaq sought SEC approval to list the Hashdex Nasdaq Ethereum ETF, which is managed by Toroso Investments. Toroso is a registered commodity pool operator with the Commodity Futures Trading Commission and a member of the National Futures Association. The ETF planned to invest in ether, ether futures contracts listed on the Chicago Mercantile Exchange (CME), cash, and cash equivalents.

The proposed ETF had generated several public comments over recent months, reflecting a divide among lawmakers and industry stakeholders. Democratic Senators Laphonza Butler of California and Jack Reed of Rhode Island urged the SEC to reject spot Ethereum ETFs, expressing concerns over potential market risks and regulatory issues. Conversely, Representatives French Hill of Arkansas, Tom Emmer of Minnesota, and Josh Gottheimer of New Jersey advocated for the approval of these funds, emphasizing the importance of fostering innovation and competitiveness in the U.S. financial markets.

While the Hashdex proposal has been withdrawn, other spot Ethereum ETF proposals remain in the pipeline. These issuers must still obtain effective S-1 registration statements before trading can commence. The SEC has recently begun discussions with issuers regarding their S-1 forms, a process that analysts predict could extend over several weeks.

The withdrawal of Hashdex's proposal highlights the regulatory complexities and challenges faced by firms seeking to launch cryptocurrency-based ETFs in the U.S. market. As the SEC continues to scrutinize these proposals, the future of Ethereum ETFs remains uncertain, underscoring the ongoing debate over the regulation and integration of digital assets within the traditional financial system.