(Reuters) - Crypto asset manager Grayscale Investments' proposal for an exchange-traded fund tied to ether futures was withdrawn last week, according to a Tuesday notice from the U.S. Securities and Exchange Commission.

WHY IT'S IMPORTANT

The decision by NYSE Arca -- the exchange where Grayscale's ETF would have been listed if approved -- to withdraw the application comes just weeks before the SEC is set to deliver a final decision on proposals for ETFs tied to the spot price of ether from VanEck and ARK Investments/21 Shares. Seven other firms, including Grayscale, have similar proposals pending.

U.S. issuers and other firms expect the SEC to deny those applications and others, citing discouraging meetings with the regulator, Reuters reported.

CONTEXT

Several investment managers in October launched futures-based ETFs tied to the value of ether, the world's second-largest cryptocurrency -- the first such products in the United States.

Grayscale filed its application in September, shortly before the other ether futures ETFs began trading, but the SEC delayed making a decision on its proposal. It was due to deliver a final decision May 30.

Grayscale's proposal to convert its existing Grayscale Ethereum Trust ( ETHE ) into a spot ether ETF is still pending. In that application, Grayscale has argued that because the SEC approved ether futures ETFs, it should also approve ETFs tied to the cryptocurrency's spot price, since futures prices are derived from the spot market.