BlackRock Argues for Fair Treatment of Spot-Crypto and Crypto-Futures ETFs
BlackRock recently submitted an application for a spot-Ether (ETH) ETF called the “iShares Ethereum Trust” to the U.S. Securities and Exchange Commission (SEC). In its application, BlackRock questioned the SEC’s treatment of spot crypto ETFs, arguing that there is no valid reason for treating spot-crypto and crypto-futures exchange-traded fund applications differently.
The SEC has approved several crypto futures ETFs, citing superior regulation and consumer protections under the 1940 Act. However, BlackRock contends that this preference lacks relevance, as it does not address the underlying assets of the ETFs. BlackRock believes that the SEC’s distinction between registration of ETH futures ETFs under the 1940 Act and spot ETH ETPs under the 1933 Act is unfounded in the context of ETH-based ETP proposals.
BlackRock Challenges SEC’s Reasoning
BlackRock pointed out that the SEC has already approved crypto futures ETFs via the CME, indicating that CME surveillance can detect spot-market fraud affecting spot ETPs. Therefore, BlackRock argues that there is no justifiable reason for the SEC to reject their application under its current line of thinking.
It is widely believed among analysts that the first SEC approval of a spot crypto ETF may be imminent. Bloomberg analysts predict a 90% chance of approval before Jan. 10 next year.
Hot Take: Implications for Crypto Regulation
The ongoing debate over how the SEC treats spot-crypto and crypto-futures ETF applications raises questions about regulatory fairness and consistency in the crypto market. If approved, a spot-Ether (ETH) ETF could pave the way for broader acceptance and integration of cryptocurrencies into traditional financial markets.
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