BlackRock has recently filed a new application for an Ethereum ETF spot. The updated filing, known as a 19b-4 document, notably excludes any involvement in Ethereum staking. This is significant considering that BlackRock’s Bitcoin ETF is currently the second largest in the market and is expected to surpass Grayscale.
The filing reveals that BlackRock’s iShares Ethereum Trust will operate under Nasdaq Rule 5711(d), which covers Commodity-Based Trust Shares. This amendment completely replaces the previous one. Once approved by senior Nasdaq management, this proposed rule change will be communicated to the Board as necessary.
BlackRock’s iShares Ethereum Trust will be sponsored by iShares Delaware Trust Sponsor LLC, a subsidiary of BlackRock. The trust will issue shares that represent fractional interests in its net assets, primarily consisting of ETH and cash held by a custodian. Notably, the trust will not engage in Ethereum staking or any activities to earn additional ETH. The filing states:
“The trust will operate under a trust agreement involving BlackRock Fund Advisors as trustee and Wilmington Trust, National Association, as the Delaware Trustee. Coinbase Custody Trust Company will hold the trust’s assets and manage the ETH holdings in a cold storage custody account. Coinbase Inc., the affiliate of the Ether Custodian, will act as the prime broker for the trust, handling trading activities.”
The iShares Ethereum Trust aims to mirror the performance of ETH prices, as stated in the filing. The trust intends to achieve this by holding ETH and refraining from engaging in staking activities. This aligns with its strategy of offering a simple and direct investment method. The shares provide an alternative to directly purchasing and holding ETH, which can be stressful for many investors.
The Bank of New York Mellon will serve as the trust’s custodian and administrator of its cash holdings. The trust agreement allows the trustee to delegate duties to agents, and significant responsibilities have been assigned to the trust administrator and other affiliates.
The trust may occasionally acquire rights to other virtual currencies or assets incidentally related to its ETH holdings. These rights could arise from events like forks or airdrops on the Ethereum blockchain. However, the trust’s sponsor will ensure that these incidental rights and virtual currencies are permanently abandoned and not factored into the trust’s net asset value (NAV).
The iShares Ethereum Trust is not registered under the Investment Company Act of 1940. Instead, it operates under a specific regulatory framework set by the SEC and Nasdaq, ensuring compliance with all necessary rules and guidelines. Reportedly, the trust’s shares will be registered with the SEC through a registration statement on Form S-1, which will provide details about the trust’s structure, operations, and objectives.
Source: BlackRock
Article by Jai Hamid, adapted by Cryptopolitan
