The U.S. Securities and Exchange Commission has postponed its decision on a proposed rule change by Nasdaq’s International Securities Exchange to allow the listing and trading of options on BlackRock’s iShares Ethereum Trust (ETHA). 

Initially expected by Sept. 26, the decision has now been delayed until Nov. 10, giving the SEC additional time to evaluate the proposal’s potential impact on market stability.

The SEC’s final decision on Ethereum options could further integrate the cryptocurrency into traditional financial markets. Some argue that options for crypto ETFs could inject another wave of liquidity and spur bullish market behavior.

If approved, the options would follow the same regulatory framework as other ETF-linked derivatives, offering investors new ways to hedge or speculate on Ethereum’s price movements.

Under Section 19(b)(2) of the Securities Exchange Act, the regulator can delay its ruling for up to 90 days, allowing a deeper evaluation of market stability and risk.

The proposal, submitted on July 22, aims to amend existing rules to enable options trading on BlackRock’s iShares Ethereum Trust, which holds Ethereum managed by Coinbase and cash reserves by The Bank of New York Mellon. 

The trust is structured as a passive investment vehicle, focusing solely on providing exposure to Ethereum without engaging in staking or proof-of-stake validation activities.

This decision comes on the heels of a similar approval on Monday when the SEC greenlit options trading on BlackRock’s iShares Bitcoin Trust (IBIT). The approval followed several amendments to address concerns over market manipulation and excessive risk-taking.

In a related development, the SEC has also postponed its ruling on a separate proposal by NYSE American LLC to list and trade options on the Bitwise Ethereum ETF, the Grayscale Ethereum Trust, and the Grayscale Ethereum Mini Trust. 

While the SEC ponders its decision on Ethereum options, the Ethereum ETF market has wobbled. Ethereum ETFs saw their largest net outflows since July, with over $79 million on Monday. 

The exodus was led by Grayscale’s spot Ether ETF (ETHE), which recorded a massive $80.6 million in single-day withdrawals—the largest since the spot Ether ETFs launched earlier this year.

Edited by Sebastian Sinclair

The United States Securities and Exchange Commission (SEC) announced Tuesday that it has charged TrueCoin LLC and TrustToken Inc.—a pair of companies behind the TrueUSD (TUSD) stablecoin—with fraudulent and unregistered sales of investment contracts.

The regulator called TrueUSD a “purported stablecoin,” and charged the firms with false marketing claims related to the safety and backing of the dollar-pegged crypto asset. The companies have settled the charges without admitting or denying the allegations, and will collectively pay approximately $700,000 in penalties in the agreement.

“TrueCoin and TrustToken sought profits for themselves by exposing investors to substantial, undisclosed risks through misrepresentations about the safety of the investment,” said Jorge G. Tenreiro, Acting Chief of the SEC’s Crypto Assets & Cyber Unit, in a release. “This case is a prime example of why registration matters, as investors in these products continue to be deprived of the key information needed to make fully informed decisions.”

Editor’s note: This story is breaking and will be updated with additional information.

The Moskowitz Law Firm filed another class-action lawsuit against a crypto firm Thursday, this time alleging that OpenSea’s customers were sold NFTs as unregistered securities.

The lawsuit brought in a Florida federal court claims that two residents of the Sunshine State sustained damages as a result purchasing NFTs on the platform, which served as a go-to place to purchase digital art and collectibles when the NFT market ran red-hot in 2021 and 2022.

“We have learned a great deal in our extensive crypto litigation,” Moskowitz Law Firm Managing Partner Adam Moskowitz told Decrypt in a statement. “With today’s ever-changing regulation, there should be a process to sell NFTs in a well-regulated environment.”

The Miami-based law firm is currently litigating against a wide range of crypto firms and their associates, including FTX and 11 celebrities who endorsed the collapsed crypto exchange. It has also sued basketball legend Shaquille O’Neal over his Solana-based NFT project Astrals, and soccer star Cristiano Ronaldo over his promotion of the crypto exchange Binance.

The latest lawsuit alleges that OpenSea engaged in a scheme “to mislead and deceive investors” while unjustly enriching itself by charging fees on NFT transactions. The Florida residents believed that NFTs traded on OpenSea were registered securities due to OpenSea’s representations, a copy of the case’s complaint shared with Decrypt states.

While the lawsuit does not list damages resulting from NFT purchases, it asserts that NFTs fall under the definition of a security as investment contracts. In various enforcement actions, the SEC itself has asserted similar claims, stating that NFT purchasers invested money in a common enterprise with the expectation of profit derived from the efforts of others.

Moskowitz’s lawsuit follows OpenSea’s disclosure of receiving a Wells notice in August, signaling that the Securities and Exchange Commission (SEC) is likely to sue the marketplace. On Twitter (aka X), OpenSea CEO Devin Finzer described the prospect of an enforcement action against OpenSea as a step into uncharted territory that puts artists at risk.

“The SEC [is] threatening to sue us because they believe NFTs on our platform are securities,” Finzer, a resident of Miami, said. “We should not regulate digital art in the same way we regulate collateralized debt obligations.”

As Finzer pointed out, NFTs can represent ownership in many things, including domain names, trading cards, and event tickets. Earlier this week, SEC Commissioners Hester Peirce and Mark Uyeda described the regulator’s approach to NFTs as “misguided and overreaching.”

Though the commissioners accused the SEC of an overzealous application of securities laws while targeting an NFT-gated restaurant chain, Moskowitz’s lawsuit argues that “the SEC’s stance on cryptocurrency has always been consistent.”

Last month, the law firm notched a partial win in its case against O’Neal, when a Florida judge ruled that the case could proceed on some accusations. In Thursday’s complaint, Moskowitz pointed to OpenSea as a platform where NFTs from O’Neal’s Astrals project were available.

OpenSea did not immediately respond to a request for comment from Decrypt.

Edited by Andrew Hayward