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BlockFi joins the race for a spot bitcoin ETF

BlockFi has filed a proposal for a spot bitcoin exchange-traded fund (ETF) with the Securities and Exchange Commission (SEC).

The BlockFi NB Bitcoin ETF would trade on the New York Stock Exchange and hold bitcoin, according to its S-1.

The filing is under the Securities Act of 1933, and joins more than 20 similar proposals awaiting a decision from the U.S. securities regulator. Only 10 of those proposals have a decision date from the SEC, which comes when the attached exchange files a 19b-4 to list the product. NYSE has yet to file a 19b-4. 

The BlockFi NB Bitcoin ETF joins BlockFi’s proposed futures offering, the BlockFi Bitcoin Strategy Fund. The futures filing came after SEC Chair Gary Gensler hinted he’d be more likely to approve a futures-based bitcoin product under the Investment Companies Act of 1940 as opposed to the many 1933 Act spot proposals sitting in the SEC’s inbox. 

Since then, multiple 1940 Act futures products have received the green light to trade, though BlockFi’s futures proposal has yet to move forward.

Still, it’s unclear what will come of the spot ETF proposals. The SEC is supposed to decide the fate of VanEck’s offering by November 14, the first of the lot. Bloomberg Senior ETF analyst Eric Balchunas speculated on Twitter that BlockFi’s proposal is a way of staying in the mix of issuers vying for approval, but until Gensler indicates he’s had a change of heart on spot bitcoin products, “this thing is on ice like the rest (25-ish) of them.” 

The move may be part of a broader push towards crypto ETFs for the financial services firm. Last month, it announced it had teamed up with investment manager Neuberger Berman to create a business that would launch crypto asset management products like ETFs and “other traditional structures.”

But it’s also been a tumultuous regulatory season for the lender. BlockFi is still facing a cease-and-desist from the state of New Jersey for its interest accounts. Alabama, Texas, Vermont and Kentucky are making similar inquiries into the firm’s high-yield accounts, arguing that they constitute securities offerings themselves.



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