The U.S. Securities and Exchange Commission (SEC) has opened a forum for public comment on BlackRock's recent proposed amendments to the Spot Ethereum Exchange Traded Fund (ETF).
The request comes after Nasdaq submitted an updated proposal on April 19, refining its previous proposal to align with regulators' expectations.
BlackRock's Spot Ethereum ETF is under consideration
BlackRock's ETF, named iShares Ethereum Trust, aims to accurately reflect the price of Ethereum. The ETF proposal, first submitted in November 2023, saw changes to its structure, particularly regarding its creation and redemption process.
Unlike the original version, which involved direct exchange with Ethereum, the revised proposal suggests a cash-based transaction model.
This shift to a cash redemption strategy reflects a cautious regulatory approach reminiscent of last year's debate over spot Bitcoin ETFs. These models, which were subsequently approved in January, also prioritize cash trading over physical trading, potentially setting a precedent for Ethereum ETFs.
Read more: Ethereum ETF explained: What it is and how it works
The SEC's Request for Comments will enter a critical review phase, allowing stakeholders and the public to influence the final decision. As stated on the SEC's official website, responses to this proposal are expected to be submitted within 21 days from the announcement.
The broader landscape for crypto ETFs remains uncertain. Prominent companies such as Fidelity and Grayscale have also revised their Ethereum ETF applications to integrate staking provisions and cash-based models. Despite these efforts, market analysts remain skeptical.
Bloomberg's Eric Balciunas recently downgraded the chances of an Ethereum ETF being approved by May.
“We're keeping our odds at 25%, but to be honest, 25% is a very pessimistic number. The lack of engagement seems purposeful rather than procrastinating. Everywhere you look… There are no positive signs or information. Personally I hope they approve, but it doesn't look very good,” Balciunas said.
As deadlines approach for other crypto-related decisions, including the Franklin Templeton and Grayscale proposals, the SEC emphasizes strong regulatory oversight and stakeholder involvement in the decision-making process, and calls for a systematic approach. It seems that he is taking
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