BlackRock has maintained that there is no justification for the U.S. Securities and Exchange Commission (SEC) to handle exchange-traded funds (ETFs) for cryptocurrency futures any differently than it does for spot-crypto ETFs. The ‘iShares Ethereum Trust,’ the company’s plan for an Ethereum (ETH) ETF, was formally verified on November 9th, after Nasdaq’s submission of the 19b-4 application form to the SEC on behalf of BlackRock. BlackRock questioned the SEC’s handling of spot cryptocurrency exchange-traded funds (ETFs) in its application, claiming that the agency misrepresented futures and spot ETFs in order to justify consistently rejecting these applications.
While the SEC has granted multiple crypto futures ETFs, it has not yet accepted a single spot-crypto ETF proposal. The securities commission has stated that this is because, under the 1940 Act, crypto futures ETFs are purportedly subject to better oversight and consumer protections than spot crypto ETFs, which are governed under the 1933 Act. Furthermore, it seems that the SEC prefers regulation and surveillance-sharing agreements to the digital asset futures market offered by the Chicago Mercantile Exchange (CME). BlackRock contends that the 1940 Act imposes “certain restrictions on ETFs and ETF sponsors,” not the underlying assets of the ETFs, hence the SEC’s preference for it is irrelevant in this context.
According to BlackRock, the SEC has “clearly determined that CME surveillance can detect spot-market fraud that would affect spot ETPs” in light of the approval of cryptocurrency futures ETFs through the CME. According to the business, this basically means that, based on its current perspective, the SEC has no legitimate reason to reject the application. Analysts covering cryptocurrencies and exchange-traded funds (ETFs) largely believe that the first spot crypto ETF to be approved by the SEC will soon be released, perhaps one that tracks Bitcoin. Analysts James Seyffart and Eric Balchunas of Bloomberg ETFs forecast a 90% likelihood of approval before January 10 of the next year.
