{"id":65981,"date":"2023-11-30T18:03:38","date_gmt":"2023-11-30T22:03:38","guid":{"rendered":"https:\/\/coinscreed.com\/staging\/?p=65981"},"modified":"2023-11-30T18:04:25","modified_gmt":"2023-11-30T22:04:25","slug":"blackrock-adjusts-proposed-spot-bitcoin-etf-structure","status":"publish","type":"post","link":"https:\/\/coinscreed.com\/staging\/blackrock-adjusts-proposed-spot-bitcoin-etf-structure\/","title":{"rendered":"BlackRock Adjusts Proposed Spot Bitcoin ETF Structure"},"content":{"rendered":"\n

BlackRock has revamped its ETF redemption model to mitigate against market manipulation<\/a> and other regulatory sticking points.<\/p>\n\n\n\n

\"BlackRock
BlackRock Adjusts Proposed Spot Bitcoin ETF Structure<\/figcaption><\/figure>\n\n\n\n

The largest asset manager in the world, BlackRock, has revised its application for a spot in the Bitcoin Exchange-Traded Fund (ETF) to address concerns raised by the Securities and Exchange Commission<\/a> (SEC) of the United States.<\/p>\n\n\n\n

The modifications center on resolving concerns with market manipulation and broker-dealer registrations, and they are described in full in the meeting minutes from a conversation held with the SEC's Division of Trading and Markets on November 28, 2023.<\/p>\n\n\n\n

\n

Looks like BlackRock met with the SEC's Trading & Markets division again yesterday and gave presented them with a "revised" in-kind model design based on Staff's comments at their 11\/20 meeting.. h\/t @btcNLNico\r\n \r\n \r\n \r\n <\/g>\r\n \r\n \r\n \r\n <\/clipPath>\r\n <\/defs><\/svg><\/span><\/a> here's full doc: https:\/\/t.co\/sgOpY5D1jz<\/use><\/svg><\/span><\/a> pic.twitter.com\/863pWOX6w0<\/use><\/svg><\/span><\/a><\/p>— Eric Balchunas (@EricBalchunas) November 29, 2023<\/use><\/svg><\/span><\/a><\/blockquote>

BlackRock's Updated Redemption Model<\/h2>\n\n\n\n

In its updated proposal, BlackRock adds a “prepaid model” to the current in-kind redemption scheme. Under this strategy, before ETF shares are sent to the registered broker-dealer business<\/use><\/svg><\/span><\/a> for redemption, the offshore market maker must provide a cash prepayment to the latter.<\/p>\n\n\n\n

With this modification, the broker-dealer will be shielded from the hassles of sending Bitcoin to the market maker, lowering its financial risk. Even with these changes, BlackRock argues that the in-kind structure has several benefits over a cash redemption approach. <\/p>\n\n\n\n

These consist of decreased transaction costs, optimized processes, and a diminished possibility of manipulation. The asset management argues that improving the timing and custody transfer procedures to address problems with the balance sheet and broker-dealer registrations could help the Bitcoin ETF proposal comply with regulatory requirements while enhancing shareholder incentives.<\/p>\n\n\n\n

It must be clarified if the changes offer enough safeguards to allay SEC concerns about retail investors' spot exposure to Bitcoin through an ETF.<\/p>\n\n\n\n

Competition For Regulatory Approval<\/h2>\n\n\n\n

Financial behemoths such as BlackRock and Fidelity Investments have applied to the SEC in an effort to create a spot Bitcoin exchange-traded fund (ETF).<\/p>\n\n\n\n

But the road to acceptance has its challenges. In the past, the SEC has been cautious about approving spot Bitcoin ETFs because of concerns about inadequate oversight and market manipulation<\/a>.<\/p>\n\n\n\n

These worries have been echoed by the SEC's recent comments on the most recent applications, especially with regard to the ambiguity surrounding the precise spot transactions for surveillance-sharing arrangements.<\/p>\n\n\n\n

On November 17, social media speculations were going around that the SEC might have told applicants to use cash-creation techniques instead of sending Bitcoin in-kind.<\/p>\n\n\n\n

The duties of issuers may be drastically altered by this unconfirmed development, necessitating more covert management of Bitcoin transactions. If this new strategy is effective, broker-dealers can avoid being directly involved in cryptocurrency transactions<\/a> outside the purview of current regulatory systems.<\/p>\n","protected":false},"excerpt":{"rendered":"

BlackRock has revamped its ETF redemption model to mitigate against market manipulation and other regulatory sticking points. The largest asset manager in the world, BlackRock, has revised its application for a spot in the Bitcoin Exchange-Traded Fund (ETF) to address concerns raised by the Securities and Exchange Commission (SEC) of the United States. The modifications […]<\/p>\n","protected":false},"author":43,"featured_media":65983,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[21],"tags":[1520,940,143],"class_list":["post-65981","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-news","tag-blackrock","tag-etf","tag-sec"],"jetpack_featured_media_url":"https:\/\/coinscreed.com\/staging\/wp-content\/uploads\/2023\/11\/croc_1701379303642.jpg","jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/coinscreed.com\/staging\/wp-json\/wp\/v2\/posts\/65981","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/coinscreed.com\/staging\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/coinscreed.com\/staging\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/coinscreed.com\/staging\/wp-json\/wp\/v2\/users\/43"}],"replies":[{"embeddable":true,"href":"https:\/\/coinscreed.com\/staging\/wp-json\/wp\/v2\/comments?post=65981"}],"version-history":[{"count":0,"href":"https:\/\/coinscreed.com\/staging\/wp-json\/wp\/v2\/posts\/65981\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/coinscreed.com\/staging\/wp-json\/wp\/v2\/media\/65983"}],"wp:attachment":[{"href":"https:\/\/coinscreed.com\/staging\/wp-json\/wp\/v2\/media?parent=65981"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/coinscreed.com\/staging\/wp-json\/wp\/v2\/categories?post=65981"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/coinscreed.com\/staging\/wp-json\/wp\/v2\/tags?post=65981"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}