Business News Report
February 08, 2024

ARK Investment and 21Shares Revise Ethereum ETF Proposal, Improve Cash Creation and Redemption

In Brief

A revised Ethereum ETF proposal from ARK Investment and 21Shares proposes to only facilitate cash delivery in creation and redemption process.

ARK Investment and 21Shares Pivot Ethereum ETF Proposal, Address Cash Creation and Redemption Process

A revised spot Ethereum exchange-traded fund (ETF) proposal from investment management company ARK Investment and 21Shares proposes to only facilitate the delivery of cash in its creation and redemption process. The creation and redemption of shares in ETFs had previously been a focal point in discussions between issuers seeking to launch spot Bitcoin ETFs and the Securities and Exchange Commission (SEC).

The SEC is likely inclined towards a cash model, wherein issuers must promptly sell stored assets to generate cash for returning to investors. This stands in contrast to an in-kind model favoured by certain asset firms such as BlackRock during the approval process for their spot Bitcoin ETF, providing managers with greater flexibility in portfolio management.

Bloomberg Intelligence analyst Eric Balchunas observed a modification in the filing submitted by ARK Investment and 21Shares. 

The revised filing incorporates a new staking component, indicating that the “Sponsor” may periodically engage one or more trusted “Staking Providers” to stake a portion of the “Trust’s” assets. The “Sponsor” anticipates primarily staking ETH, Ethereum’s native tokens from the Trust’s Cold Vault Balance.

“In consideration for any staking activity in which the Trust may engage, the Trust would receive certain staking rewards of ether tokens, which may be treated as income to the Trust. The amount of ether the Trust may receive as a reward for its staking activity can vary significantly,” said the filing. 

ARK Investment and 21Shares Seek Approval for Spot Ethereum ETF 

ARK Investment and 21Shares applied for the spot Ethereum ETF in September, outlining that the fund aims to offer direct exposure to ETH. It is set to trade on the Cboe BZX Exchange, utilizing the CME CF ETH-Dollar Reference Rate.

In the initial filing, 21Shares is identified as the sponsor of the Trust, while Delaware Trust Company serves as the trustee and Coinbase Custody Trust Company acts as the custodian. ARK Investment Management takes on the role of sub-adviser for the Trust, offering support in marketing the 21Shares. Last year, the SEC further postponed the decision timeline for the ARK Investment and 21Shares spot Ethereum ETF and solicited public comments. 

Recently, the agency has extended deadlines for proposals from various other asset management companies, including Grayscale Investments, Fidelity, BlackRock and the Invesco Galaxy.

The amended application from ARK Investment and 21Shares, highlighting a cash model and incorporating staking components, is set to facilitate the potential timely approval of the spot Ethereum ETF, reflecting the evolving dynamics in the regulatory landscape.   

Disclaimer

In line with the Trust Project guidelines, please note that the information provided on this page is not intended to be and should not be interpreted as legal, tax, investment, financial, or any other form of advice. It is important to only invest what you can afford to lose and to seek independent financial advice if you have any doubts. For further information, we suggest referring to the terms and conditions as well as the help and support pages provided by the issuer or advertiser. MetaversePost is committed to accurate, unbiased reporting, but market conditions are subject to change without notice.

About The Author

Alisa, a dedicated journalist at the MPost, specializes in cryptocurrency, zero-knowledge proofs, investments, and the expansive realm of Web3. With a keen eye for emerging trends and technologies, she delivers comprehensive coverage to inform and engage readers in the ever-evolving landscape of digital finance.

More articles
Alisa Davidson
Alisa Davidson

Alisa, a dedicated journalist at the MPost, specializes in cryptocurrency, zero-knowledge proofs, investments, and the expansive realm of Web3. With a keen eye for emerging trends and technologies, she delivers comprehensive coverage to inform and engage readers in the ever-evolving landscape of digital finance.

Hot Stories

Turning Domains into the Backbone of Web3 with D3

by Victoria d'Este
May 23, 2025
Join Our Newsletter.
Latest News

The Calm Before The Solana Storm: What Charts, Whales, And On-Chain Signals Are Saying Now

Solana has demonstrated strong performance, driven by increasing adoption, institutional interest, and key partnerships, while facing potential ...

Know More

Crypto In April 2025: Key Trends, Shifts, And What Comes Next

In April 2025, the crypto space focused on strengthening core infrastructure, with Ethereum preparing for the Pectra ...

Know More
Read More
Read more
DeFi Execution Without the DeFi Headache With Pluton Finance
Hack Seasons Interview Business Markets Technology
DeFi Execution Without the DeFi Headache With Pluton Finance
May 23, 2025
Turning Domains into the Backbone of Web3 with D3
Hack Seasons Interview Business Markets Technology
Turning Domains into the Backbone of Web3 with D3
May 23, 2025
Gate’s GET To Transform Entertainment With Web3-Powered Participatory Economy
News Report Technology
Gate’s GET To Transform Entertainment With Web3-Powered Participatory Economy
May 23, 2025
Hinkal Declares “Public Wallets Are Dead” as It Builds the Future of Institutional Privacy in DeFi
Hack Seasons Interview Business Markets Technology
Hinkal Declares “Public Wallets Are Dead” as It Builds the Future of Institutional Privacy in DeFi
May 23, 2025