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BlackRock contends SEC lacks basis for distinguishing between crypto futures and spot ETFs

BlackRock contends SEC lacks basis for distinguishing between crypto futures and spot ETFs

BlackRock has questioned the SEC’s preference for the 1940 Act in overseeing futures ETFs, arguing that it is irrelevant to both crypto-spot and crypto-futures ETFs. The asset management giant believes that the SEC has no legitimate reason to treat spot-crypto and crypto-futures ETF applications differently. While the SEC has approved several crypto futures ETFs, it has yet to greenlight a single spot-crypto ETF application. The regulator claims that futures ETFs have better regulation and consumer protections under the 1940 Act compared to spot-crypto ETFs covered by the 1933 Act. However, BlackRock argues that this preference lacks relevance as it does not address the underlying assets or the markets from which their pricing is derived. The firm believes that the SEC’s approval of crypto futures ETFs via the CME indicates that CME surveillance can detect spot-market fraud that would affect spot ETFs, leaving no justifiable reason to reject spot-crypto ETF applications. Analysts predict that the first SEC approval of a spot crypto ETF, possibly a Bitcoin-related one, is imminent.

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