SEC Pushback Forces BlackRock To Modify Bitcoin ETF's Redemption Model

BlackRock, the world's largest asset manager, has been forced to modify the redemption model for its proposed Bitcoin exchange-traded fund (ETF) due to pushback from the Securities and Exchange Commission (SEC). The SEC has expressed concerns over the potential for market manipulation and liquidity issues in the Bitcoin market. As a result, BlackRock has amended its filing to include a "cash create" redemption mechanism. This means that the ETF will allow authorized participants to redeem their shares for cash instead of Bitcoin. This modification is seen as a compromise between BlackRock's original proposal and the SEC's regulatory requirements.

ARK Invest and 21Shares, two other asset management firms, have also submitted an amended filing for their Bitcoin ETF to the SEC. Similar to BlackRock, they have indicated their willingness to implement a "cash create" redemption mechanism as required by the agency. This move comes in response to the SEC's concerns over market manipulation and the lack of transparency in the Bitcoin market. By allowing authorized participants to redeem their shares for cash, the firms aim to address these concerns and increase the overall appeal and viability of the proposed ETF.