The U.S. Securities and Exchange Commission (SEC) has announced a call for public comment on recent changes to the law. black rock We propose a spot Ethereum exchange traded fund (ETF). This follows Nasdaq's proposed amendments on April 19 to ensure consistency with regulators' expectations.
The BlackRock ETF, iShares Ethereum Trust, is an ETF used to track the performance of the Ethereum price and has been in development since its inception. filing In November 2023.
This amendment is a fairly radical departure from the original proposal by changing from a direct exchange model with Ethereum to a cash transaction model. As a result, the SEC provided 21 days for interested parties and the public to submit comments on the proposed amendments. These comments are important because they will influence the regulatory review and possibly the final decision.
BlackRock Ethereum ETF structure revision
The first suggestion of iShares Ethereum Trust This included a creation and redemption process that involved direct modification of Ethereum. Nevertheless, the amended resubmission clarifies that these procedures will be conducted in cash transactions. This type of model, called a cash redemption model, is consistent with the approach used for the Spot Bitcoin ETF, which was approved by the SEC in January.
The move to a cash-based approach is seen as an adjustment to regulatory fines that focus on financial rather than physical transactions.
BlackRock's amendment also does not include a staking provision, in contrast to companies like Fidelity and Fidelity. grayscale, includes a staking mechanism in the revised ETF application. This amendment signals BlackRock's cautious stance, likely to expedite the approval process by closely monitoring regulatory precedent.
Market reaction and analyst perspective
The US crypto ETF landscape remains fraught with uncertainty, with major financial institutions resubmitting proposals to get the green light. However, despite such attempts, sentiment among market analysts is becoming increasingly skeptical about the near-term approval of Ethereum ETFs.
the current, Bloomberg ETF Analyst Eric Balchunas has lowered his prediction of the probability that these ETFs will be approved by May from about 70% to 25%.
meanwhile, standard chatter has changed its initial bullish outlook and now believes it is highly unlikely that an Ethereum ETF will be approved by the SEC in May. This change in expectations follows the failure to publicize constructive dialogue between the SEC and ETF applicants, which was a prior indicator of approval for a Bitcoin ETF.
The SEC's delayed decisions on other ETF proposals, including Franklin Templeton and Grayscale, demonstrate the cautious regulatory approach to crypto-inspired financial products. The extended timeline gives the SEC an opportunity to gather and study public feedback, which will largely determine the regulatory environment for Ethereum and other crypto ETFs.
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