BlackRock partners with Coinbase Custody for Spot Bitcoin ETF, while SEC lawsuit resolution nears.
In a significant and unexpected move, BlackRock, the financial giant, submitted an application for a spot Bitcoin ETF, causing a major stir in the crypto industry. The timing of this filing is particularly noteworthy, as it coincides with a period of intense regulatory scrutiny in the United States.
A notable aspect of the filing is BlackRock’s selection of Coinbase as the custodial services provider. Interestingly, Coinbase is the same company that the US SEC recently sued for alleged violations of custody regulations and other charges. If the SEC were to grant approval for BlackRock’s filing, it could potentially expedite the resolution of the lawsuit against Coinbase.
Crypto market experts have shared their perspective on the subject, including insights from renowned crypto analyst WhaleWire. According to WhaleWire, BlackRock’s Spot Bitcoin ETF application states that Coinbase will serve as the custodian. However, since Coinbase is considered a noncompliant entity by the SEC, there is a high likelihood (around 99%) of the ETF application being rejected, similar to other Bitcoin ETF proposals. Additionally, the analyst notes that ETFs can be influential in manipulating prices, often driving them downwards. Interestingly, this manipulation could actually work in favor of bullish investors.
Also Read: SEC halts ETH futures ETFs.
Market analyst and expert, Will Clemente, finds the situation “hilarious” and points out the apparent disconnect. Despite the SEC previously approving Coinbase’s IPO in 2021, they have now filed a lawsuit against the exchange. Amidst this ongoing legal battle, BlackRock has chosen Coinbase as its custodial partner. It’s worth noting that BlackRock, in the past, expressed the belief that Bitcoin served as an “index of money laundering.” The juxtaposition of these events and statements adds to the irony of the situation.
6 years ago, Blackrock’s CEO Larry Fink called Bitcoin an “index of money laundering” when BTC was $6K.
Today they’ve filed for an ETF.
Everyone gets Bitcoin at the price they deserve. pic.twitter.com/YqdIQIJZwt
— Will Clemente (@WClementeIII) June 15, 2023
Will the US SEC Show Favoritism towards BlackRock?
Why would BlackRock make a strategic move now, considering the US SEC’s aggressive actions against prominent crypto participants? The perspectives of crypto market experts shed light on this ongoing development. According to some market participants, if the SEC grants approval to BlackRock, it would be seen as a glaring example of bias. This suggests that the SEC may be favoring large players while suppressing smaller ones within the industry.
Grayscale Investments has been actively pursuing the conversion of the Grayscale Bitcoin Trust into a spot Bitcoin ETF. Should the SEC approve BlackRock’s filing, there is a potential for Grayscale to file a significant lawsuit against the securities regulator.
According to Will Clemente, if BlackRock’s spot ETF application receives approval, it becomes undeniable that Operation Chokepoint 2.0 was orchestrated to expel native crypto companies while welcoming established traditional firms that maintain close ties with the US government, aiming to exert control over Bitcoin and the broader cryptocurrency space.
Caitlin Long, the founder of Custodian Bank, is actively surveying the community regarding the recent developments involving BlackRock.
— Caitlin Long 🔑⚡️🟠 (@CaitlinLong_) June 15, 2023
Important: This article is intended solely for informational purposes. It should not be considered or relied upon as legal, tax, investment, financial, or any other form of advice.
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