Prime Agent Puzzle: SEC Verdict On BlackRock’s Appointment

BlackRock, the investment firm, has designated a ‘Prime Execution Agent,’ a third-party broker tasked with executing the buying and selling of Bitcoins. This move comes amidst growing expectations within the community regarding the imminent launch of a Spot Bitcoin ETF.

In a recent post on X, James Seyffart, a senior analyst at Bloomberg, provided insights into the minimal likelihood of the SEC approving BlackRock’s engagement with a third party, citing the regulatory body’s purported discomfort with the involvement of a Prime Execution Agent.

The Cash Custodian or the Prime Execution Agent will hold the cash deposits on behalf of BlackRock, per the BlackRock proceedings. However, The company previously identified Coinbase as its custodian when BlackRock filed an ETF application, even though it hasn’t disclosed the identity of the Prime Execution Agent.

According to reports, the regulators and the cryptocurrency exchanges had discussed the “19b-4 filings.” The SEC stated in relation to these disclosures that they favor “cash creates” over in-kind transactions in Bitcoin ETFs, even though these filings signal a regulation shift.

SEC Unusual Joint Call with Bitcoin ETF Applicants Raises Eyebrows

Fox Business correspondent Charles Gasparino suggested the occurrence of an unusual joint conference call featuring the SEC and applicants for spot Bitcoin ETFs. Additionally, Fox Business Journalist Eleanor Terrett stated that the calls aimed to ensure that all parties engage in cash creation. She mentioned, ‘The SEC Governor requested issuers to eliminate references to in-kind redemptions from their filings.

In light of these significant developments, Seyffart expressed concerns, noting that the SEC may not approve of a Prime Execution Agent (a third party engaging in Bitcoin transactions on behalf of the ETF) acquiring Bitcoin through the cash model.

He also included a list of ETF filers who choose in-kind payment methods and those who have already registered for cash-creates. His analysis indicates that Bitwise was the first platform to adopt a “Cash-Only” strategy.

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The author’s views are for reference only and shall not constitute any investment advice. Please ensure you fully understand and assess the products and associated risks before purchasing.

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