BlackRock Updates S-1 Filing, Further Advancing Approval for Ethereum ETF

BlackRock took a step towards approval of its Ethereum ETF by revising its S-1 registration statement on May 29th, according to a filing. The document was drafted based on BlackRock’s initial registration statement submitted in November 2023. ETF analyst James Seyffart of Bloomberg stated that this filing is a step towards launching the ETF following the SEC’s approval of the 19b-4 listing rule change on May 23rd. Seyffart reiterated his belief that the S-1 statement may be approved in the coming weeks to facilitate the launch of the Ethereum ETF, although he acknowledged that it typically takes several months under normal circumstances to obtain approval. The S-1 filing filled in several placeholder fields, including details of the seed capital. According to the filing, the fund purchased 400,000 shares of seed capital at a price of $25 per share, resulting in $10 million in proceeds. The iShares Delaware Trustee is permitted to charge up to $500,000 in fees annually, but the latest filing did not calculate the trustee fees as a percentage. The trust fund will issue and redeem shares in increments of 40,000, with the fund code being ETHA. Wilmington Trust National Association will act as the Delaware trustee, while BNY Mellon acts as the trust administrator and cash custodian. The new S-1 also reintroduced the possibility of in-kind creation and redemption, allowing authorized participants to transact in crypto assets instead of cash. The fund acknowledges that approval of in-kind transactions is not guaranteed and the timing is uncertain. BlackRock’s initial S-1 statement briefly mentioned the possibility of in-kind creation and redemption. However, the revision notice for the 19b-4 filing submitted by Nasdaq in April stated that authorized participants will rely solely on cash when creating and redeeming fund shares. The latest S-1 also explicitly states that BlackRock will not engage in ETH staking, aligning with the second amendment to the 19b-4 filed by Nasdaq on behalf of BlackRock on May 22nd. Currently, all other Ethereum ETF issuers have also removed the possibility of staking from their applications.