Blackrock Files with SEC for Spot Bitcoin ETF, Coinbase as Custodian

Global asset manager BlackRock has filed an application with the Securities and Exchange Commission (SEC) to offer a spot bitcoin exchange traded fund (ETF) – iShares Bitcoin Trust – using the crypto exchange Coinbase for custody and market pricing.

If the SEC approves the application, the fund will trade on the Nasdaq, making it one of the first publicly traded spot bitcoin ETF in the US.

“The Shares are intended to constitute a simple means of making an investment similar to an investment in bitcoin rather than by acquiring, holding and trading bitcoin directly on a peer-to-peer or other basis or via a digital asset exchange,” the filing said.

In conjunction with Coinbase, Blackrock introduced a private Bitcoin trust a year ago, giving institutional investors access to the biggest cryptocurrency. Aladdin, BlackRock’s analytics platform, has had access to the exchange’s crypto data since last August.

Given that the SEC has intensified its campaign against cryptocurrency firms and has accused both Binance and Coinbase of rules violations, it is uncertain whether the regulator would approve BlackRock’s application.

It has already rejected many previous requests from other asset managers on the basis that the tokens trade on uncontrolled exchanges with monitoring and manipulation risks.

Grayscale Investments LLC is suing the SEC for refusing to approve the conversion of what was then the world’s largest crypto investment vehicle into a listed ETF. According to the lawsuit, the SEC’s decision was arbitrary, especially given it approved the introduction of ETFs based on bitcoin futures.

BlackRock’s action also comes at a time when the SEC has proposed new custody rules that would require asset managers to take on more obligations to ensure customer assets are held in properly segregated accounts.

The $9.5 trillion asset manager is considered one of the most influential financial institutions globally and boasts over 400 launched ETFs.