- Undisclosed investigation into Ethereum Foundation adds uncertainty to the future of spot Ethereum ETFs.
- SEC postpones decisions on Ethereum ETFs, reflecting regulatory uncertainty in the cryptocurrency market.
BlackRock, takes a step toward integrating blockchain technology with conventional financial markets through the launch of its first Ethereum-based fund. The move represents an effort to connect established finance with cutting-edge technologies.
The fund, known as BlackRock USD Institutional Digital Liquidity Fund (BUIDL), is backed entirely by cash, U.S. Treasury bills and repurchase agreements.
This facility offers investors with specific requirements the ability to earn US dollar returns through a completely novel structure.
For the implementation of this project, as we have described in ETHNews, BlackRock has collaborated with Securitize to facilitate the transfer and tokenization of the assets, while BNY Mellon acts as custodian of these. In addition, support is provided by entities such as Anchorage Digital Bank NA, BitGo, Coinbase and Fireblocks to provide the infrastructure necessary for the efficient operation of the fund.
Investors interested in this fund must meet certain requirements, including setting up a digital wallet and registering with Securitize, with a minimum initial investment of $5 million. This will allow them to acquire tokens at a stable price and benefit from the interest generated.
SEC and Ethereum Classification
Paul Grewal, Coinbase’s chief legal officer, has questioned the SEC’s basis for classifying ETH as a security, as well as its reasons for rejecting spot Ethereum ETFs. This debate centers on the widespread adoption of ETH and its potential impact on numerous U.S. citizens.
Sigh… again with the ETH misinformation as we await a decision on ETH ETPs. Ok–let’s talk about some basic facts about Ethereum. Millions of Americans hold ETH; it has been vital to crypto since its 2015 launch; and ETH is a commodity, not a security. 1/10
— paulgrewal.eth (@iampaulgrewal) March 20, 2024
Grewal points to statements by former SEC officials indicating that ETH should not be considered a security. In addition, he mentions that both the Commodity Futures Trading Commission (CFTC) and federal courts have consistently classified ETH as a commodity.
Ex. E. The Howey test doesn’t determine ETH’s status, and as we have explained in depth in other proceedings, digital assets like ETH that do not involve an ongoing contractual obligation related to a business enterprise are not “investment contracts” or otherwise “securities.”…
— paulgrewal.eth (@iampaulgrewal) March 20, 2024
The Future of Ethereum ETFs in Cash
The SEC has postponed its decision on several spot Ethereum ETFs, highlighting the regulatory uncertainty in the cryptocurrency sector. Despite the high interest in these ETFs, which promise to offer a regulated and traditional way to invest in ETH, the current legal and regulatory environment keeps firms and investors in a state of waiting.
