By Hassan Mehmood (Saudi Arabia)
BlackRock, the biggest asset management firm in the world has set up a new Trust for the Ethereum blockchain called iShares Ethereum. The firm is now a registered enterprise in Delaware. According to analysts, the entity could be a sign for filing of a new ETF application.
The firm registered Bitcoin Trust in June this year before filing for a Bitcoin spot ETF. The Ethereum trust has been registered in Delaware Division Corporation since November.
Various Financial Companies Filed for Bitcoin ETFs
The registering agent of the firm is Daniel Schweiger at BlackRock Wilmington DE. Schweiger is the managing director of BlackRock. During the last few weeks, various financial firms have filed for Bitcoin ETFs. The Securities and Exchange Commission (SEC) has continued to take more time to process the request and issue a verdict on the matter.
The federal agency took an extension for Ark 21Shaares and VanEck on 27th September and extended it to 25th and 26th December. Galaxy Digital, Grayscale, and Invesco have also applied for spot ETF applications.
Ark Invest and 21Shares Announce New Crypto ETFs
Ark Invest and 21Shares introduced a new series of digital asset-based ETFs in November. The new product intends to invest in long-term Bitcoin and Ethereum futures contracts.
The current price of ETH is around $2000 and continued to increase reaching highest since April. This recent price appreciation has countered the sluggish performance of the token during the last few months.
BlackRock representatives recently stated that SEC does not have any legal grounds to treat Bitcoin spot and Bitcoin futures ETFs differently. The firm pointed out disparities in SEC using 1940s Act to apply on futures ETFs only.
According to the asset management entity, the aforementioned Act does not address all the requirements for spot and futures ETFs. The iShares Ethereum Trust became a regulated entity last week following a 19b-4 application confirmation by SEC via NASDAQ.
BlackRock Raises Questions About SEC’s Approach Towards Crypto ETFs
BlackRock has mentioned in its iShares ETH application that the federal agency has continued to delay the approval of spot ETF applications based on incorrect regulatory differences between futures and spot digital currency ETFs.
The firm retained that SEC has approved futures-backed digital currency ETFs while pointing out that derivative contracts’ value is based on the spot prices of the digital currency.
Furthermore, the firm retained that the SEC should also approve crypto spot ETFs that are based on spot price of ETH. SEC has incorporated 1940 Act in comparison to 1933 Act to cover spot digital currency ETFs.
On the other hand, the regulator has added additional requirements such as surveillance-sharing agreements rather than Chicago Mercantile Exchange issued digital asset futures. BlackRock posits that the SEC restrictions does not address the underlying assets for spot and futures ETFs.
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