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 <p class="is-style-lead">BlackRock, the world’s largest asset manager, has recently updated its application for a spot Bitcoin Exchange-Traded Fund (ETF) in a bid to address the U.S. Securities and Exchange Commission’s (SEC) concerns.</p>
 <p>The revisions, detailed in the meeting minutes from a Nov. 28, 2023, discussion with the SEC’s Division of Trading and Markets, focus on mitigating issues related to market manipulation and broker-dealer registrations.</p>
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    <p lang="en" dir="ltr">Looks like BlackRock met with the SEC's Trading &amp; Markets division again yesterday and gave presented them with a "revised" in-kind model design based on Staff's comments at their 11/20 meeting.. h/t @btcNLNico here's full doc: https://t.co/sgOpY5D1jz pic.twitter.com/863pWOX6w0</p>— Eric Balchunas (@EricBalchunas) November 29, 2023
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 <h2 class="wp-block-heading" id="blackrock-s-updated-redemption-model">BlackRock’s updated redemption model</h2>
 <p>In its revised proposal, BlackRock introduces a “prepaid model” within the existing in-kind redemption framework. This model requires the offshore market maker to prepay cash to the registered broker-dealer entity before the delivery of ETF shares in the redemption process.</p>
 <p>This adjustment is designed to reduce the financial risks for the broker-dealer by separating it from the complexities of transferring Bitcoin to the market maker.</p>
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 <p>BlackRock maintains that the in-kind structure, even with these modifications, offers several advantages over a cash redemption method. These include lower transaction costs, streamlined operations, and a reduced risk of manipulation.</p>
 <p>The asset manager contends that resolving issues with the balance sheet and broker-dealer registrations by modifying the timing and custody transfer processes could facilitate the Bitcoin ETF application’s compliance with regulatory standards and simultaneously improve incentives for shareholders.</p>
 <p>Whether the updates provide sufficient guardrails to offset SEC unease regarding spot Bitcoin exposure for retail investors through an ETF remains unclear.</p>
 <h2 class="wp-block-heading" id="race-for-regulatory-green-light">Race for regulatory green light</h2>
 <p>The move to establish a spot Bitcoin ETF has gained traction recently, with financial giants like BlackRock and Fidelity Investments submitting applications to the SEC.</p>
 <p>However, the path to approval is fraught with challenges. The SEC has historically been hesitant to approve spot Bitcoin ETFs, citing worries over market manipulation and insufficient surveillance measures.</p>
 <p>Recent feedback from the SEC on the latest applications has reiterated these concerns, particularly the lack of clarity on specific spot exchanges for surveillance-sharing agreements.</p>
 <p>On Nov. 17, rumors circulated on social media that suggested the SEC might have directed applicants to adopt cash-creation methods rather than transferring Bitcoin in-kind.</p>
 <p>This unconfirmed shift could significantly change the responsibilities of issuers, requiring them to manage Bitcoin transactions more discreetly. If true, this new approach could enable broker-dealers to sidestep direct involvement in crypto transactions that fall beyond existing regulatory frameworks.</p>
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  </svg> <span class="cn-block-related-link__prefix"> Read more: </span> Analyst points to imminent signs of spot Bitcoin ETF approval
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<p>Source: <a rel="noopener noreferrer nofollow" target="_blank" href="https://thebittimes.com/blackrock-modifies-proposed-spot-bitcoin-etf-to-meet-sec-requirements-tbt72160.html">https://thebittimes.com/blackrock-modifies-proposed-spot-bitcoin-etf-to-meet-sec-requirements-tbt72160.html</a></p>

BlackRock modifies proposed spot Bitcoin ETF to meet SEC requirements

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