May 8 (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futures was withdrawn last week, according to a Tuesday notice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.

(Reporting by Hannah Lang in New York; editing by Diane Craft

)