NEWS: In a letter to the U.S. Securities and Exchange Commission (SEC), BlackRock, the world's largest asset manager, questioned the SEC's preference for the 1940 Act that oversees futures ETFs, arguing that It is irrelevant for both spot and futures cryptocurrency ETFs.
BlackRock argued that the SEC has no reason to treat spot and futures cryptocurrency ETFs differently. Both types of ETFs offer exposure to cryptocurrency prices, and both types of ETFs are subject to the same risks, such as volatility and potential market manipulation.
BlackRock also argued that the SEC is using the 1940 Act as an excuse to delay the approval of spot cryptocurrency ETFs. The law was passed in 1940, and was designed to regulate mutual funds. Futures ETFs, on the other hand, are based on futures contracts, which are a different financial instrument.
The SEC has approved two cryptocurrency ETFs, but both ETFs are based on futures. The SEC has rejected several applications for approval of cryptocurrency spot ETFs, citing concerns about market manipulation and investor protection.
BlackRock's letter is a new push for the approval of spot cryptocurrency ETFs. BlackRock is a respected company, and its support of cryptocurrency spot ETFs could help persuade the SEC to approve them.
However, the SEC is not required to follow BlackRock's recommendation. The SEC has the right to approve or reject cryptocurrency spot ETFs at its own discretion
Source: Cointelegraph
