BlackRock has submitted an application to the U.S. Securities and Exchange Commission (SEC) to update the rules for the iShares Ethereum Trust. Specifically, the investment firm seeks to gain the ability to redeem Ethereum in kind, rather than through traditional cash redemptions.
This is reported by Finway
Advantages of the New Rules
This innovation will allow investors to receive cryptocurrency directly, which should enhance the liquidity, transparency, and efficiency of the ETF fund management. Additionally, it will open new opportunities for staking, which involves using assets on the Ethereum network to earn rewards.
As part of this proposal, BlackRock has also:
- proposed the option to redeem shares in the form of Ethereum, rather than just cash;
- added a new asset custodian, in addition to Coinbase Custody Trust;
- changed the name of the fund, which has not yet been disclosed;
- updated the procedures for creating and redeeming the ETF.
Discussions with the SEC
Representatives from BlackRock, including Robert Mitchnick, head of the digital assets division, met with members of the SEC’s crypto group to discuss:
- the possibility of integrating staking into the Ethereum-ETF;
- standards for approving new crypto funds;
- technical aspects of launching options on crypto-ETFs, including position limits and liquidity.
“This could be a ‘quantum leap’ for the industry,” Mitchnick stated in March, describing the potential impact of staking on ETFs.
It is worth noting that the SEC has postponed its decision regarding staking in the Ethereum-ETF from Grayscale Investments and the in-kind redemption of shares in products from VanEck and WisdomTree until June 2025. Recently, the lobbying group Crypto Council for Innovation and around 30 crypto companies reached out to SEC Commissioner Hester Peirce for clarification regarding staking.