ARK Invest and 21Shares address cash creation and redemption process in latest spot Ethereum ETF filing

Crypto News- In their recent regulatory filing, ARK Invest and 21Shares have outlined a distinct approach for their proposed spot Ethereum exchange-traded fund (ETF). The filing reveals a noteworthy emphasis on cash transactions, indicating that Authorized Participants will exclusively transact in cash for both the creation and redemption of shares.

ARK Invest and 21Shares address cash creation and redemption process in latest spot Ethereum ETF filing

This move aligns with ongoing discussions between issuers and the Securities and Exchange Commission (SEC) regarding the preferred model for ETF transactions, particularly evident in the realm of spot bitcoin ETFs. The SEC’s inclination towards a cash-based model signifies a departure from the in-kind model favored by some industry players like BlackRock.

Notably, the updated filing also introduces a new staking component, suggesting potential engagement with trusted Staking Providers to stake a portion of the Trust’s assets. The Trust stands to receive staking rewards in ether tokens, potentially generating additional income. However, the language surrounding this addition indicates a cautious approach, with brackets signifying a willingness to discuss potential implications.

ARK Invest and 21Shares Forge New Path with Ethereum ETF Proposal: Emphasizing Cash Transactions and Introducing Staking Component

The initial proposal, submitted in September, outlined plans for the ETF to offer direct exposure to ether and trade on the Cboe BZX Exchange. 21Shares serves as the trust’s sponsor, with Delaware Trust Company as trustee and Coinbase Custody Trust Company as custodian. ARK Investment Management will act as the sub-adviser, aiding in marketing efforts.

Despite the ongoing dialogue and adjustments, the SEC has yet to reach a decision on the proposed ETF, opting to extend deadlines and solicit public input. Similar delays have affected other spot Ethereum ETF proposals, including those from Grayscale Investments and the Invesco Galaxy Ethereum ETF.

As regulatory discussions continue, ARK Invest and 21Shares remain committed to navigating the evolving landscape of cryptocurrency ETFs, aiming to provide investors with innovative avenues for accessing digital assets.