The SEC is anticipated to deny applications for spot Ethereum ETFs following discouraging meetings with issuers.

The U.S. Securities and Exchange Commission (SEC) is expected to reject applications for spot exchange-traded funds (ETFs) tied to the price of Ethereum, the second-largest crypto by market value. According to a Reuters report, U.S. financial firms don’t expect spot Ethereum ETF approval to happen in May, citing discouraging meetings with the watchdog in recent weeks.

Thus far, VanEck, ARK Investment Management, and seven other issuers have submitted filings with the SEC to list spot Ethereum ETFs. The SEC is required to make decisions on VanEck’s and ARK’s filings, which are the first in line, by May 23 and May 24 respectively, the report notes.

However, according to Reuters, the recent meetings between issuers and the SEC have been described as one-sided, with agency staff not engaging in substantive discussions about the proposed products. The people say the lack of engagement contrasts sharply with the extensive and detailed discussions that took place before the SEC gave the green light to spot Bitcoin ETFs earlier in January.

The lack of engagement has led many to believe that the SEC is likely to reject the filings, as its staff didn’t articulate specific concerns or ask questions during the meetings, the sources say. It’s worth noting that the SEC’s rejection of spot Bitcoin ETFs in the past was due to concerns about market manipulation. Nonetheless, the agency was still forced to approve them after Grayscale Investments won a court challenge, demonstrating that its proposed spot Bitcoin ETF closely resembled the previously approved Bitcoin futures ETFs.