The financial services platform with cryptocurrencies, BlockFi, presented this Monday before the Securities and Exchange Commission of the United States (SEC) the documentation to request the approval of a bitcoin spot fund (ETF). ). BlockFi has become known worldwide for offering interest to those who deposit crypto assets on its platform, in addition to providing loans to its users.
According to the preliminary prospectus of the company published on the website of the SEC, the name of the instrument will be BlockFi NB Bitcoin ETF , which “issues beneficial interest common shares listed on the New York Stock Exchange.”
Regarding the approximate start date of the proposed sale to the public, from BlockFi they clarify that it will be “as soon as possible” after the effective date of the request submitted today, Monday, November 8. That is to say: we have to wait.
As highlighted, the investment objective of the ETF is that the shares reflect the performance of the bitcoins held by the Fund, less expenses and other responsibilities . “The fund will not seek to reflect the performance of any index or benchmark.” They add.
The company specifies that the sponsor of the Fund will be BlockFi NB LLC and the trustee will be Delaware Trust Company. They also speak of a custodian, but do not clarify in the document which will be .
BlockFi indicates that the ETF, except for a liquidation or “extraordinary circumstances”, will not buy or sell bitcoins directly , although it can tell the Custodian to sell BTC “to pay certain expenses. ”
“ The ETF will hold your bitcoins in a regulated third party that is incorporated as a trust company under New York Banking Law, ”they say.
By definition, the bitcoin spot ETFs are a means to acquire bitcoin, with the advantage that the custody and management of the BTC are in charge of the administrators From the bottom. Each share has a fraction of BTC, whose value fluctuates with the price of bitcoin .
As explained by CriptoNoticias, when an ETF share is acquired, managers use the money to buy bitcoin, which is then stored in a cold wallet, offline . The gains or losses for the owner of the share in a given period are similar to those that a holder of bitcoin would have, although the ETF contemplates the collection of a commission for administrative operations. The shares are settled in fiat money .
BlockFi warns that investing in bitcoin ETFs involves “significant risks”, which will not be appropriate to shareholders unwilling to accept more risk than may be involved with other exchange-traded products that do not have bitcoin or BTC-related interests.
“Stocks are speculative securities. Your purchase involves a high degree of risk and you could lose your entire investment. You should consider all risk factors before investing in ETFs ”, they warn. And, in turn, they highlight that neither the SEC nor any securities commission has approved the request.
BlockFi Crash Record
BlockFi’s request comes a few months after the authorities of New Jersey, Alabama, Texas and Vermont restricted the operations of that platform, which cannot offer savings accounts in cryptocurrencies or add new clients in those regions of the United States, as was reported in this medium.
Regulatory bodies argue that savings accounts in cryptocurrencies that BlockFi offers can be considered securities ( securities ) and that the firm does not have permits to provide these services. This interpretation arises from the interests that users can earn by depositing assets on the platform .
Another request to the list
The request emanating from BlockFi joins the list of companies that are still awaiting a response – positive or negative – from the top US regulator, which so far has approved only three ETFs (and futures).
In previous weeks, the approval of the bitcoin futures ETFs of the firms ProShares, Valkyries and VanEck was registered. These movements directly influenced the all-time high for BTC at the end of October, as reported by CriptoNoticias.
The fact is that, right now, BlockFi will have to wait, since, for now, It is estimated that on November 14 the SEC will finally decide on the spot bitcoin ETF presented by VanEck on March 19.