SEC pushes back decisions regarding the in-kind work and redemption of BlackRock Ethereum ETF -

Key takeout

The SEC has delayed the verdict on the creation and redemption of BlackRock’s proposed Spot Ethereum ETF in physical form.
BlackRock ETFs will suspend regulatory approval and enable stock creation and redemption directly using Ethereum tokens.

The SEC has expanded the timeline dominating NASDAQ’s proposal to allow BlackRock spot Ethereum iShares Ethereum Trust (ETHA) to provide in-kind creation and redemption, according to new submissions.

A physical model based on SEC reviews reflecting traditional commodity ETF mechanics allows authorized participants (APS) to directly transfer Ethereum (ETH), replacing current cash-based creation and redemption processes, reducing slippage and simplifying operations.

In reality, APS can deliver the actual ether to the ETF issuer in exchange for new shares, redeem the shares and reclaim the shares rather than settling them in cash.

BlackRock filed an amended S-1 registration statement with the SEC in May, seeking approval to allow ETHA fund’s in-kind work and redemption. Asset managers are also awaiting regulatory decisions regarding similar physical models for iShares Bitcoin Trust (IBIT).

Other fund managers, including 21Share, Fidelity, Wisdom Tree, Bitwise and Vanek, also submitted to enable the creation and redemption of the physical encrypted ETFs.

SEC Commissioner Hester Peirce previously stated that the real creation and redness of the cryptographic ETF “are definitely coming at some point.”