BlackRock, Bitwise, and Grayscale Update 19b-4 Filings, Remove Staking Provisions for Spot Ethereum ETFs

BlackRock, Grayscale, and Bitwise have submitted updated 19b-4 filings to the United States Securities and Exchange Commission (SEC) for their proposed spot Ethereum (ETH) exchange-traded funds (ETFs), notably removing provisions related to staking. This move is part of a broader strategy to align with regulatory expectations and increase the likelihood of gaining SEC approval for these ETFs.

Details of the Updated Filings

In their amended filings, BlackRock clarified that they would not participate in staking activities. According to their filing: “Neither the Trust, nor the Sponsor, nor the Ether Custodian […] nor any other person associated with the Trust will, directly or indirectly, engage in action where any portion of the Trust’s ETH becomes subject to the Ethereum proof-of-stake validation or is used to earn additional ETH or generate income or other earnings.” This statement underscores BlackRock’s commitment to maintaining a straightforward, non-operational exposure to Ethereum for investors.

Similarly, Grayscale and Bitwise have made corresponding amendments, ensuring their applications are devoid of staking provisions. This uniform approach across major asset managers signifies a concerted effort to meet SEC guidelines and streamline the approval process.

Industry-Wide Changes

On May 21, other prominent financial firms, including Fidelity, VanEck, Franklin Templeton, Invesco Galaxy, and ARK 21Shares, also updated their filings to remove staking-related clauses. This wave of amendments reflects a significant shift in strategy among ETF sponsors to comply with regulatory feedback and enhance their prospects for approval.

Implications for the Market

The SEC is expected to announce its decision on the approval or denial of these spot Ethereum ETF applications by May 23, the final deadline for VanEck’s application. The removal of staking provisions is seen as a proactive measure to address regulatory concerns and facilitate a smoother approval process.

Regulatory and Political Context

The recent updates in ETF filings come amidst a changing regulatory landscape, potentially influenced by broader political and economic factors. Speculation about a favorable shift in the SEC’s stance has grown following former President Donald Trump’s endorsement of cryptocurrencies, which may have impacted the Biden administration’s policy outlook on digital assets.

In parallel, the House of Representatives has passed the Financial Innovation and Technology for the 21st Century Act, aiming to provide greater regulatory clarity for digital assets. This legislative development could further support the approval and integration of cryptocurrency-related financial products in the mainstream financial system.

Conclusion

The coordinated effort by leading financial firms to update their 19b-4 filings and remove staking provisions is a strategic move to align with SEC expectations and enhance the likelihood of approval for spot Ethereum ETFs. As the SEC’s decision deadline approaches, market participants remain optimistic about the potential listing and trading of these ETFs, which could significantly impact the accessibility and adoption of Ethereum among institutional and retail investors.

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