- Nasdaq has submitted a proposal to the SEC seeking approval to list BlackRock’s spot Ethereum ETF, following the regulator’s approval of ETH-based futures ETFs.
- The proposal argues for uniform regulation, treating Bitcoin and Ethereum as commodities, and aligning the rules for spot ETFs with those of gold ETFs.
- Nasdaq emphasizes its commitment to market surveillance measures and investor protection, urging the SEC to approve spot ETF applications for Bitcoin and Ethereum.
Nasdaq has filed a proposal with the U.S. Securities and Exchange Commission (SEC) seeking approval to list BlackRock’s spot Ethereum exchange-traded fund (ETF). This move follows the SEC’s recent approval of Ethereum-based futures ETFs in October, which has paved the way for the consideration of spot ETFs. Nasdaq’s proposal aims to leverage the regulatory framework applied to commodity-based Trust shares and advocates for uniformity in the oversight of digital and traditional assets.
Pushing for Uniform Regulation and Mainstream Adoption
In its filing, Nasdaq contends that both Bitcoin (BTC) and Ethereum (ETH) should be classified as commodities, aligning them with the regulatory treatment of assets such as gold. This argument mirrors the one presented in spot Bitcoin ETF applications. Nasdaq maintains that the SEC lacks grounds to block a spot-based ETF for Bitcoin or Ethereum, as it already permits the Chicago Mercantile Exchange (CME) to host futures-based ETFs for these digital assets.
By urging the SEC to approve the applications for spot ETFs, Nasdaq aims to provide U.S. investors with a safe and regulated means to gain exposure to Bitcoin and Ethereum. The exchange emphasizes that it meets all regulatory requirements and has robust surveillance mechanisms in place to protect investors from fraud and market manipulation.
Highlighting Market Surveillance Measures
Nasdaq assures the SEC that it adheres to the necessary surveillance standards, emphasizing its membership in the Intermarket Surveillance Group (ISG). As an ISG member, Nasdaq monitors and reports illicit activities to other participants, including the SEC. Additionally, Nasdaq collaborates with Coinbase, a prominent cryptocurrency exchange, to monitor spot markets and detect any signs of manipulation or fraudulent behavior.
Addressing concerns about market surveillance, Nasdaq asserts that the mechanisms in place for the spot Bitcoin and Ethereum markets are equally as robust as those for the futures market. The exchange points out that the CME futures market meets the SEC’s criteria for a well-regulated market of significant size.
The Proposed iShares Ethereum Trust
The proposed iShares Ethereum Trust will be established as a collaborative effort between iShares Delaware Trust Sponsor, an indirect subsidiary of BlackRock Inc., a leading investment management corporation, and BlackRock Fund Advisors. This ETF will track the performance of Ethereum (ETH), reflecting the price movements of the underlying cryptocurrency.
Coinbase Custody Trust Company will serve as the “Ether Custodian” and will securely hold the majority of ETH in cold storage, ensuring the protection of investors’ assets. It’s important to note that access to the hardware, software, systems, and procedures of the Ether Custodian may not be readily accessible to individual investors.
The net asset value (NAV) of the ETF will be determined based on the total assets, including ETH and cash, minus any liabilities. Nasdaq acknowledges that the NAV calculation may not align with U.S. generally accepted accounting principles (GAAP) and grants iShares Delaware Trust Sponsor the exclusive authority to determine the ETF’s NAV.
To facilitate the valuation process, the ETF will rely on the CME CF Ether-Dollar Reference Rate – New York Variant (“CF Benchmarks Index”), which calculates the Ether-U.S. dollar trading activity across major spot trading platforms on a daily basis.
Conclusion
Nasdaq’s proposal to list BlackRock’s Ethereum ETF represents a significant step towards advancing the mainstream adoption of digital assets. By leveraging the SEC’s recent approval of Ethereum-based futures ETFs, Nasdaq advocates for uniform regulation and equal treatment of cryptocurrencies as commodities. The exchange assures the SEC of its commitment to robust market surveillance measures to protect investors from fraud and manipulation. With the proposed iShares Ethereum Trust, investors can potentially gain regulated exposure to Ethereum, further bridging the gap between traditional finance and the world of cryptocurrencies.
Disclaimer
The information provided in this article is for informational purposes only and should not be considered financial advice. The article does not offer sufficient information to make investment decisions, nor does it constitute an offer, recommendation, or solicitation to buy or sell any financial instrument. The content is opinion of the author and does not reflect any view or suggestion or any kind of advise from cryptonewsbytes.com. The author declares he does not hold any of the above mentioned tokens or received any incentive from any company.
