Crypto News- The Securities and Exchange Commission (SEC) made waves with its latest move, extending the review period for BlackRock’s Ethereum exchange-traded fund (ETF) proposal. Alongside BlackRock, the regulator also pushed back its decision on a similar ETF proposal from crypto heavyweight Fidelity.
Under the regulatory guidelines, the SEC can defer its decision multiple times before reaching a final verdict, with the first deadline now set for May. In a notable step, the SEC has invited public comments on the approval of Ethereum ETFs to evaluate the adequacy of the proposals.
In its filing, the SEC flagged concerns about the underlying assets of the iShares Ethereum Trust. Specifically, the commission is scrutinizing Ethereum’s proof of stake consensus mechanism and the potential concentration of control within its ecosystem.
Ethereum ETF Faces SEC Review: Proof of Stake Model Sparks Regulatory Debate
The SEC’s query raises pertinent questions: Does Ethereum’s unique ecosystem, including its proof of stake model and centralized influence, pose heightened risks of fraud or manipulation?
Both BlackRock and Fidelity submitted their Ethereum ETF proposals last November, prompting a flurry of similar filings from other major firms. However, the SEC announced a delay in January, citing the need for more time to review the proposals, despite approving Bitcoin ETFs on the same day.
SEC Chair Gensler sought to allay concerns, emphasizing that the delays should not be misconstrued as deliberate obstruction.
An ETF, akin to a mutual fund, allows investors to trade shares throughout the day, in contrast to mutual funds which trade once after market close.
Market analysts remain divided on the timeline and prospects for BlackRock’s ETF approval. The US policy landscape could sway the decision and influence the performance of crypto-based ETFs. BlackRock’s Bitcoin ETF already boasts a staggering $10 billion in assets under management.
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