Franklin Templeton Applies for Spot Ethereum ETF with SEC Filing
Franklin Templeton filed an S-1 form with the US SEC for spot Ethereum ETF, joining eight asset managers who aim to launch similar products.
Investment management firm Franklin Templeton submitted its application for a spot Ethereum exchange-traded fund (ETF) to the United States Securities and Exchange Commission (SEC). Franklin Templeton is now among eight ETF providers aiming to launch spot Ethereum ETFs. All eight contenders had earlier introduced spot Bitcoin products in January.
The company submitted an S-1 registration statement for the Franklin Ethereum ETF, outlining its plan for a fund that will closely mirror the price movements of Ethereum’s native cryptocurrency ETH. In handling the assets, Coinbase Custody Trust Company is set to be the custodian for ETH, while the Bank of New York Mellon will oversee cash holdings.
If approved, the shares of the ETF will be listed and traded on the Cboe BZX Exchange.
According to the information provided in Franklin Templeton’s filing, the “Authorized Participants”, those permitted to engage in the creation and redemption of shares, will exclusively use cash transactions.
Additionally, the filing said, “The Sponsor may, from time to time, stake a portion of the Fund’s assets through one or more trusted Staking Providers, which may include an affiliate of the Sponsor. In consideration for any staking activity in which the Fund may engage, the Fund would receive certain staking rewards of ether tokens, which may be treated as income to the Fund.”
With the recent move, Franklin Templeton has joined other investment management firms including Ark Invest and 21Shares, Grayscale Investments, and BlackRock. All these entities have filed applications for spot Ethereum ETFs over the last few months.
Notably, Ark Invest and 21Shares recently updated their registration statement for their potential spot Ethereum ETF, incorporating cash creation and redemption, along with a new staking component. Franklin Templeton’s filing aligns with this trend, opting for cash transactions and also including staking in its approach.
Spot Ethereum ETF Decisions Delayed, Prompting Expert Speculation
The SEC has postponed decisions on applications for several Ethereum ETFs in January, including those from Grayscale Investments, Fidelity, BlackRock, and the Invesco Galaxy. This has led analysts to hold mixed expectations regarding the likelihood of approval for such a product this year. However, some anticipate approval in May.
Recently, Cathie Wood, the CEO and Chief Information Officer (CIO) of ARK Invest, voiced skepticism about the SEC approving spot ETFs for cryptocurrencies other than Bitcoin and Ethereum. During an interview with the Wall Street Journal, she remarked, “We would be surprised if any currency other than Bitcoin and Ethereum received SEC approval.”
Franklin Templeton’s entry into the spot Ethereum ETF arena and the industry-wide trends signal a dynamic shift in the cryptocurrency investment landscape, reflecting evolving strategies and growing anticipation despite regulatory uncertainties.
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