SEC Seeks Comments on BlackRock's Ethereum ETF

The United States Securities and Exchange Commission (SEC) has opened the door to public comment on recent changes to BlackRock's proposed Ethereum exchange-traded fund (ETF).

This request comes after... Submitted Nasdaq updated its proposal on April 19. This results in an improvement on previous orders to better align with regulatory expectations.

BlackRock Spot Ethereum ETF Under Review

To aim BlackRock's Ethereum ETF, called the iShares Ethereum Trust, aims to accurately reflect the price of Ethereum. The ETF proposal was initially presented in November 2020. It subsequently saw changes to its structure, particularly with regard to creation and redemption operations.

Unlike its original version, which included direct exchanges with Ethereum, the revised proposal proposes a cash transaction model.

This move to a cashback strategy reflects a cautious regulatory approach. This is also reminiscent of discussions surrounding Bitcoin ETFs last year. These models, which were subsequently approved in January, also favored cash transactions over in-kind exchanges, potentially setting a precedent for Ethereum ETFs.

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The SEC's request for input marks a critical review phase, allowing stakeholders and the public to influence the final decision. Responses to the proposal are expected within 21 days of the announcement, as noted on the SEC's official website.

The broader cryptocurrency ETF landscape remains uncertain. Leading entities such as Fidelity and Grayscale have also overhauled their Ethereum ETF implementations, incorporating staking provisions and liquidity-based models. Despite these efforts, market analysts remain skeptical.

He stood up Eric Balchunas Bloomberg recently lowered the likelihood that Ethereum ETFs will be approved by May.

“We're keeping the limit at 25% probability, although, frankly, that's a very pessimistic number of 25%. It appears that non-participation is intentional versus procrastination. There are no positive signs or information anywhere you look. approve it, but it doesn’t look good,” Balchunas said.

As the deadline approaches for other crypto-related decisions, including those involving proposals from Franklin Templeton and Grayscale, the SEC appears to be taking a methodical approach, emphasizing rigorous regulatory review and engagement stakeholders in decision-making processes.