Ethereum: Security or not, BlackRock CEO confident in ETH ETF approval

  • BlackRock CEO said Ethereum ETF approval is likely despite ETH designation.
  • Hopeful issuers are adding “staking” to ‘nudge the SEC.”

Blackrock’s Larry Fink’s recent take on Ethereum [ETH] ETF approval has many commentators speculating on possible outcomes.

In a recent interview with FOX Business, Larry Fink was asked if one can start an ETH ETF even if ETH is designated as “security.” To which he answered, 

“Yes, I think so.”

He added that ETH designation or categorization won’t harm ETF approval.

Fink’s revelation has sparked new speculation.

ETH ETF approval in May

Nate Geraci of ETF Store reacted to Fink’s revelation on X (formerly Twitter) and shared his opinion

“Just reading b/w lines & speculating, sounds like SEC seriously trying to classify eth as security.  If so, tough to have optimism on May spot eth ETF approval.

That said, Fink says SEC could still allow spot eth ETF post-security classification.”

Another source of confusion regarding the ETH ETF approval is the addition of “staking” in recent amendments by potential issuers. 

On 27th March, Fidelity amended its ETH ETF filing to include “staking” to users. The filing stated; 

“As a result of any staking activity in which the trust may engage, the trust expects to receive certain staking rewards of ether, which may be treated for federal income tax purposes as income to the trust.”

Like Fidelity, Grayscale’s ETH ETF filing included staking. 

However, these trends are confusing given the SEC’s stance on staking, as seen during the Kraken lawsuit in 2023. 

During the Kraken fine, the SEC warned that,

“When investors provide tokens to staking-as-a-service providers, they lose control of those tokens and take on risks associated with those platforms, with very little protection.”

Bloomberg ETF analyst Eric Balchunas claimed that the reason hopeful issuers are adding staking on the filing is to,

“To nudge the SEC, hope squeaky wheel gets grease. And, I respect the hustle but I just think SEC’s mind is decided on this.”

The Bloomberg ETF analyst has maintained a pessimistic 25% odd of May approval for ETH ETFs. 

See also  $3,000,000,000 in Ethereum Has Left Crypto Exchanges Since SEC Approved Listing of ETH ETFs, Says Analyst

However, Fink’s positive inclination toward approval, even if ETH is classified as a “security,” is worth noting. If Fink’s stance pans out, we might eventually have an ETH ETF either way. 

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