BlackRock has just submitted a new filing for a spot Ethereum ETF. This filing, an updated 19b-4 document, notably excludes any involvement in Ethereum staking. This comes as BlackRock’s Bitcoin ETF is currently the second largest in the market and is set to surpass Grayscale.
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The filing shows that BlackRock’s iShares Ethereum Trust will operate under Nasdaq Rule 5711(d), which covers Commodity-Based Trust Shares. This amendment replaces the previous one entirely. Approved by senior Nasdaq management, this proposed rule change will be communicated to the Board as necessary.
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BlackRock’s iShares Ethereum Trust will be sponsored by iShares Delaware Trust Sponsor LLC, a subsidiary of BlackRock. The trust will issue shares representing fractional interests in its net assets, consisting primarily of ETH and cash held by a custodian. Importantly, the trust will not engage in Ethereum staking or any activity to earn additional ETH. The filing states:
“The Shares have been designed to remove the obstacles represented by the complexities and operational burdens involved in a direct investment in ether, while at the same time having an intrinsic value that reflects, at any given time, the investment exposure to the ether owned by the Trust at such time, less the Trust’s expenses and liabilities.”
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.
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The iShares Ethereum Trust’s investment goal is to mirror the performance of ETH prices, as stated in the fling. The trust aims to achieve this by holding ETH and not engaging in staking activities, which aligns with its strategy of providing a simple and direct investment method. The shares offer an alternative to directly buying and holding ETH, which can be stressful for many investors.
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The Bank of New York Mellon will serve as the trust’s custodian and administrator of the trust’s cash holdings. The trust agreement allows the trustee to delegate duties to agents, and significant responsibilities have been handed to the trust administrator and other affiliates.
There Will Be Exclusion of Incidental Rights and IR Virtual Currency
The trust may sometimes get rights to acquire other virtual currencies or assets incidentally related to its ETH holdings. These could come from events like forks or airdrops on the Ethereum blockchain. However, the trust’s sponsor will ensure that 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 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 detailing the trust’s structure, operations, and objectives.
Cryptopolitan reporting by Jai Hamid
