BlackRock, a major asset manager, has made revisions to its proposed spot Bitcoin ETF structure in an effort to address concerns raised by the Securities and Exchange Commission (SEC). The changes aim to mitigate market manipulation and regulatory issues. The new model modifies the redemption process by introducing a “prepaid model” where the offshore market maker entity pre-pays cash to the registered broker-dealer entity before delivering ETF shares. BlackRock argues that this in-kind structure, even with modifications, offers advantages over a cash redemption method, including lower transaction costs and resistance against manipulation schemes. The asset manager believes that addressing balance sheet and broker-dealer registration dependencies through adjusted timing and custody transfers will optimize shareholder incentives while clearing regulatory procedures. However, it remains uncertain whether these updates will alleviate the SEC’s concerns regarding spot Bitcoin exposure for retail investors through an ETF. The race for a spot Bitcoin ETF approval has gained momentum, with BlackRock and Fidelity Investments among the major financial institutions vying for regulatory approval. Despite this, significant obstacles remain, as the SEC has previously denied applications due to concerns about manipulation and surveillance mechanisms. The SEC’s recent feedback on the latest filings highlighted these concerns, particularly the lack of clarity around surveillance-sharing agreements with specific spot exchanges. Rumors have circulated that the SEC may require cash creation processes instead of in-kind Bitcoin transfers, potentially shifting the responsibility of handling Bitcoin transactions to issuers. However, this has not been confirmed.

This News Article was automatically generated by Bob the Bot (AI)

Information	Details
Geography	North America
Countries
Sentiment	neutral
Relevance Score	1
People	None
Companies	Fidelity Investments, BlackRock, SEC
Currencies	Bitcoin
Securities	None