BlackRock has recently filed a new document for an Ethereum ETF, excluding any involvement in Ethereum staking. This comes as BlackRock’s Bitcoin ETF is on track to surpass Grayscale and become the second largest in the market.
The filing reveals that BlackRock’s iShares Ethereum Trust will operate under Nasdaq Rule 5711(d), which covers Commodity-Based Trust Shares. This amendment replaces the previous one and has been approved by senior Nasdaq management. The proposed rule change will be communicated to the Board as necessary.
BlackRock’s iShares Ethereum Trust will be sponsored by iShares Delaware Trust Sponsor LLC, a subsidiary of BlackRock. The trust will issue shares that represent fractional interests in its net assets, consisting primarily of ETH and cash held by a custodian. Notably, the trust will not engage in Ethereum staking or any activity to earn additional ETH.
The trust agreement involves BlackRock Fund Advisors as the trustee and Wilmington Trust, National Association, as the Delaware Trustee. The trust’s assets will be held by Coinbase Custody Trust Company in a cold storage custody account, with Coinbase Inc. acting as the prime broker for trading activities.
The investment goal of the iShares Ethereum Trust is to mirror the performance of ETH prices by holding ETH and not engaging in staking activities. This aligns with BlackRock’s strategy of offering a simple and direct investment method as an alternative to directly buying and holding ETH.
The Bank of New York Mellon will serve as the trust’s custodian and administrator of the trust’s cash holdings. The trust agreement allows the trustee to delegate duties to agents, with significant responsibilities given to the trust administrator and other affiliates.
The trust may occasionally receive rights to acquire other virtual currencies or assets incidentally related to its ETH holdings, such as through forks or airdrops on the Ethereum blockchain. However, the trust’s sponsor will ensure that these incidental rights and virtual currencies are permanently abandoned and not included in the trust’s net asset value (NAV).
The iShares Ethereum Trust is not registered under the Investment Company Act 1940 but operates within a specific regulatory framework set by the SEC and Nasdaq to ensure compliance with all necessary rules and guidelines. The trust’s shares will be registered with the SEC through a registration statement on Form S-1, which will provide details about the trust’s structure, operations, and objectives.