A company by the name of EtherIndex LLC has filed paperwork with the Securities and Exchange Commission (SEC) to launch an exchange traded fund (ETF) based on ether, the up and coming bitcoin competitor that runs on the Ethereum network.

The filing marks the first time a company has attempted to list an ETF based on ether; ETF’s allow investors to invest indirectly into a commodity, bonds, or a basket of assets like an index fund but are traded like a regular stock, so in this case would allow people to invest in the value of ether without investing in ether directly itself.

In the past year, both SolidX Partners, Inc. and the Winklevoss Bitcoin Trust have pursued ETFs for bitcoin.

EtherIndex is a 1-month old-company which according to Forbes is being run by Gregory DiPrisco, a futures trader at energy trading firm Axiom markets, and Joseph Quintillian, a partner at the same firm; of note neither of them appears to have any experience with cryptocurrencies.

The SEC filing itself has more holes in it than a decent slice of Swiss cheese with no details being provided as to which exchange the company is looking to list the ETF on, let alone the ticker, trustee, administrator details and chunks of other information, with Forbes rightly claiming that it looks to have been put together hastily and acts more as a shell or placeholder.

Risky business

While ETF’s have been established as viable vehicles to invest in other things they usually invest in established commodities such as gold or even bitcoin, whereas ether doesn’t even come close to fitting that definition.

The Ethereum distributed exchange only launched in July 2015 and ether, the currency exchanged on the network, has had mixed fortunes, including recently the theft of $55 million worth of the currency from the Ethereum Decentralized Autonomous Organization, this despite ether being marketed as being a safer alternative to bitcoin.

It may be too early to say for sure but it’s also unlikely that the SEC would approve the application either, even if the company gets its act together and adds the missing information; the SEC has a fiduciary duty to protect investors from dubious listings and at least at this point the idea of an ether ETF is highly dubious, let alone the seemingly amateur way the company behind it has done their paperwork.

That said expect to see more ETF’s like this being filed for in the year ahead, be it that we’d think they’re more likely to be covering bitcoin than ether.

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