BlackRock Proposes Bitcoin ETF with Cash Redemptions Amid SEC Concerns

Key Takeaways:

• BlackRock files a revised spot bitcoin ETF proposal with cash redemption mechanisms.
• The SEC has expressed concerns about investor safety and market manipulation in the initial proposal.
• Cash redemptions are considered a safer and more accessible option by the SEC.
• BlackRock joins other firms in incorporating cash redemptions until in-kind redemptions receive approval.

In a strategic move to enhance its chances of obtaining approval from the U.S. Securities and Exchange Commission (SEC), BlackRock has recently revised its spot bitcoin exchange-traded fund (ETF) proposal. The world’s largest asset manager has incorporated cash creation and redemption mechanisms into its ETF, aligning with the SEC’s preferences. This adjustment is part of a broader trend, as several firms are updating their proposals amid speculation that the SEC might greenlight multiple spot bitcoin ETF applications in January.

BREAKING NEWS 🚨

BlackRock and the SEC engaged in talks today about the potential creation of a regulatory framework for spot #Bitcoin ETF. 👀🔥 pic.twitter.com/FWS9YxFeKx

— BITCOINLFG® (@bitcoinlfgo) December 19, 2023

The innovative in-kind redemption “prepay” model will help enable major financial institutions like JPMorgan or Goldman Sachs to serve as authorized participants for the fund. This allows them to bypass limitations prohibiting the direct inclusion of Bitcoin or crypto on their balance sheets.

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Conclusion:

BlackRock’s strategic adaptation of its ETF proposal to include cash redemptions signifies a proactive response to regulatory concerns. By aligning with the SEC’s preferences, the asset management giant aims to improve its chances of securing approval for the groundbreaking ETF. As the crypto landscape continues to evolve, such adjustments reflect the industry’s commitment to addressing regulatory considerations and fostering a more secure investment environment.

Source: CoinDesk