VanEck has decided to shut down its Ethereum Futures ETF (EFUT), a product tied to the altcoin ETH. The company outlined plans for the ETF’s liquidation, with the VanEck ETF Trust‘s board of directors approving the fund’s liquidation and dissolution. VanEck highlighted that it continuously monitors and evaluates its ETF offerings based on several factors: performance, liquidity, assets under management, and investor interest. The decision to liquidate the fund resulted from analysing these factors and other operational considerations.
Disappointing News for Altcoin ETH Holders
Shareholders of the fund can sell their shares on the exchange until the market closes on September 16, 2024, though brokerage fees may apply. After this date, the fund shares will no longer be traded and will be delisted. The fund’s liquidation is expected to take place around September 23, 2024. Shareholders still holding fund shares at this time will receive a cash distribution equal to the net asset value of their shares. On September 5, 2024, the VanEck ETF Trust’s board approved the liquidation of the following fund:
- ETF Name: VanEck Ethereum Strategy ETF
- Symbol: EFUT
- Exchange: CBOE
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VanEck, as the fund’s sponsor, reiterated that it consistently monitors and evaluates ETF products based on factors like performance, liquidity, assets under management, and investor interest. After thoroughly analysing these factors and other operational considerations, the decision to liquidate this altcoin-linked fund was made. Shareholders can sell their shares on the exchange up to market close on September 16, 2024, with brokerage fees applied.
When Will the Fund Be Liquidated?
The liquidation is expected to be completed around September 23, 2024. Shareholders holding fund shares at the time of liquidation will receive a cash payout equivalent to the fund’s net asset value (NAV). The proceeds from the liquidation are expected to be sent to shareholders around this date. For tax purposes, shareholders may need to report capital gains or losses based on the difference between the sale proceeds and their original basis in the shares. Additionally, shareholders may receive a final distribution of any previously undistributed net income and capital gains earned by the fund before liquidation.
Shareholders will be informed of the final tax treatment of these distributions, including any liquidation distributions, with the fund’s year-end tax reporting. In cases where parts of the distribution are considered a return of capital, the fund will reduce the shareholder’s basis in the shares for tax purposes.
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