Investment titan BlackRock questions the SEC, arguing that spot Bitcoin and Ethereum ETFs are no different from futures ETFs
The world’s largest asset management firm is challenging the U.S. Securities and Exchange Commission (SEC), claiming that spot market exchange-traded funds (ETFs) Bitcoin (BTC) and Ethereum (ETH) are no different from futures ETFs.
In a new filing, investment giant BlackRock – which has over $8 trillion in assets under management – says the regulator should approve spot market crypto ETFs since it has already given the green light to futures ETFs.
“Given that the Commission has approved ETFs that provide exposure to ETH futures, the price of which is itself based on the underlying ETH spot market, the sponsor (BlackRock) believes that the Commission also approves ETPs (exchange-traded products ) must approve that offer exposure.” Find ETH, like the trust.”
According to BlackRock, the SEC is abusing the Investment Company Act of 1940 by applying it to spot ETFs.
“While the 1940 Act provides certain additional investor protections that the 1933 Act does not require, these protections are not intended to mitigate harms arising from the underlying assets or markets for assets held by ETFs, such as the ETFs Potential for fraud or manipulation in such markets.”
In other words, Sponsor does not believe that the application of the 1940 Act supports the purported justifications advanced by the Commission for rejecting other spot digital asset ETPs.
The 1940 law specifically lists the types of abuses it is intended to prevent and imposes certain restrictions on, among other things, accounting, borrowing, custody, fees and independent boards.
In particular, none of these restrictions affect the underlying assets of an ETF, whether ETH futures or spot ETH, or the markets from which the prices of such assets are derived, whether the CME ETH futures market or spot ETH -Markets.”
BlackRock concludes that the SEC’s distinction between futures ETFs and spot market ETFs is arbitrary.
“The Sponsor believes that the distinction between the registration of ETH futures ETFs under the 1940 Act and the registration of spot ETPs of ETH under the 1933 Act makes no difference in the context of ETH-based ETP proposals .”
Last week, BlackRock registered its iShares Ethereum Trust in the state of Delaware, a similar move to the company’s registration of its Bitcoin Trust.
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