ARK Invest and 21Shares have proposed an exchange-traded fund for spot Ethereum that incorporates a cash-generating mechanism into its buy and sell process. This was incorporated into their most recent regulatory filing. Cathie Wood, the owner of Ark Invest, further stated that authorized participants are required to deposit funds for the establish-and-redeem process, and will receive cash in exchange for withdrawing shares.
In the past, the Securities and Exchange Commission and suppliers in pursuit of opportunities to introduce spot bitcoin ETFs have deliberated on this subject in meetings. The SEC is considering implementing a cash module that would require suppliers to promptly sell assets from storage and return cash to the investor. This differs from the in-kind module. The in-kind module expands the control options available to the manager over the collection. As certain asset firms, including BlackRock, awaited authorization for their spot bitcoin ETF, they opted for the in kind module.
Eric Balchunas, an analyst at Bloomberg Intelligence, reports that ARK Invest and 21Shares have amended their S-1 filings pertaining to their spot Ether ETF.
The most recent filing included A new staking provision, allowing the sponsor to stake a portion of the Trust’s assets through one or more reputable staking providers. According to the filing, the sponsor typically stakes tokens obtained from the Trust’s Cold Vault Balance. Whenever the Trust participates in a staking activity, it will receive staking rewards in the form of Ether tokens. Variable amounts will be used.
In drafting legal documents, the term “staking” is enclosed in parenthesis, per Scott Johnsson of Van Buren Capital, to indicate that it is an addendum.
Ark Invest and 21Shares submitted their documents for spot bitcoin ETFs in September, specifying that the fund would be backed by Ether and trade on the Cboe BZX Exchange at the CME CF Ether-Dollar Reference Rate.
According to the initial filing, 21Shares sponsor the trust, the trustee is Delaware Trust Company, and the custodian is Coinbase Custody Trust Company. ARK Investment Management will serve as the trust’s sub-advisor and promote the shares.
In December, the SEC extended the deadline for resolving on the ETF matter and solicited feedback. This is also true for different Ethereum ETF recommendations. Grayscale Investments is included, as is the Invesco Galaxy Ethereum ETF.