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Nasdaq Seeks SEC Approval for Ethereum ETF Under Commodity Rules

Nasdaq urges the SEC to greenlight spot ETF applications, asserting that it provides a safe avenue for U.S. investors to access Bitcoin and Ethereum.

Nasdaq urges the SEC to greenlight spot ETF applications.
Creator: VIEW press | Credit: Corbis via Getty Images Copyright: 2021 @VIEWpress

NEW YORK CITY – Nasdaq, a leading stock exchange, has recently filed a proposal with the U.S. Securities and Exchange Commission (SEC) aiming to list BlackRock's spot Ethereum exchange-traded fund (ETF).


The move comes following the SEC's approval of Ethereum-based futures ETFs in October. Nasdaq proposes that the iShares Ethereum Trust be governed under its Nasdaq Rule 5711(d), aligning with the rules for commodity-based Trust shares.


Advocating for regulatory uniformity in both digital and traditional assets, Nasdaq argues that Ethereum and Bitcoin should be treated as commodities. It suggests that the regulatory framework for spot ETFs of these digital assets should mirror that of gold ETFs.


Nasdaq's stance is reminiscent of its arguments for spot Bitcoin ETFs, emphasizing that the SEC has already permitted futures-based ETFs for both Bitcoin and Ethereum through the Chicago Mercantile Exchange (CME). The exchange emphasizes its commitment to investor protection, asserting that it satisfies all SEC requirements, including robust surveillance mechanisms.


Surveillance Assurance and Collaboration Details


Nasdaq assures the SEC that it meets regulatory requirements for investor protection through its membership in the Intermarket Surveillance Group (ISG), actively monitoring and reporting illicit activities. The exchange underscores its collaboration with Coinbase, a cryptocurrency exchange that monitors spot markets, as a further measure to safeguard investors from fraud and manipulation.


Addressing concerns about market surveillance, Nasdaq highlights the strength of surveillance mechanisms for spot Bitcoin and Ethereum markets, asserting that they are comparable to those in futures markets. The proposed iShares Ethereum Trust will be a joint venture involving iShares Delaware Trust Sponsor, a subsidiary of BlackRock Inc., and BlackRock Fund Advisors. Coinbase Custody Trust Company will serve as the "Ether Custodian," securing the bulk of Ethereum in cold storage.


The ETF's net asset value (NAV) determination will rely on the CME CF Ether-Dollar Reference Rate. Nasdaq's proposal underscores that the ETF provides a secure and regulated pathway for investors to gain exposure to Ethereum, aligning with the evolving landscape of digital asset investment.


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