BlackRock Engages SEC on Crypto ETP Regulations and Securities Tokenization Advances

Highlights:

• Representatives from BlackRock met with the crypto task force staff to discuss issues revolving around crypto ETPs.
• Both parties also discussed the criteria for approving staking on several ETPs.
• The meeting attendees from BlackRock included high-ranking executives like the Head of Regulatory Affairs and many directors.

On May 9, the US crypto task force confirmed that its staff had met with representatives from asset management firm BlackRock. The meeting confirmation appeared in a memorandum containing details of both parties’ discussions and attendees.

The memorandum read:

“The topic discussed was approaches to addressing issues related to the regulation of crypto assets. BlackRock, Inc. Representatives provided the attached document, which was discussed during the meeting.”

BlackRock requests a meeting with the SEC Crypto Task Force to discuss the regulatory treatment of staking and its application in ETPs, the advancement of securities tokenization under the federal securities framework, the criteria for approving crypto ETPs and potential interim…

— Wu Blockchain (@WuBlockchain) May 9, 2025

Details of the Topics Discussed in the Meeting

According to the publicized document, the meeting discussions centered around five areas. The first was an overview of BlackRock’s digital asset products. The asset management firm representatives sought a market development update on these products, which include BlackRock Bitcoin ETF (IBIT), BlackRock Ethereum ETF (ETHA), and BlackRock USD Institutional Digital Liquidity Fund (BUIDL).

Secondly, both parties discussed staking, which is gradually becoming a source of major concern among asset managers. In one of its June 1 publications, Crypto2Community reported that the US Securities and Exchange Commission (SEC) postponed its final decision on Grayscale’s Ethereum ETF staking proposal. Per the news article, the regulatory commission moved its decision date to June 1, sparking mixed reactions among enthusiasts.

In the meeting with the crypto task force staff, BlackRock’s representatives enquired about the commission’s perspectives on staking and how the SEC intends to treat staked products. Additionally, they deliberated on advancing the tokenization of securities under the existing federal Securities regulatory framework.

Other areas of concern raised by BlackRock representatives include Crypto ETP approval standards and options on Crypto ETPs. They also discussed specific factors the regulatory commission considers before approving ETPs under Section 6(b) of the Exchange Act.

In addition, both parties considered a potential interim framework for ETP issuer activities. BlackRock representatives raised concerns about the standards for determining appropriate positions and exercise limits for crypto ETP options.

Some of BlackRock’s representatives include Benjamin Tecmire, Head of Regulatory Affairs; Robert Mitchnick, Head of Digital Assets; Maxwell Stein, Director of Digital Assets; Alyssa Karchmer, Associate of Digital Assets; and Sachiyo Sakemi, Managing Director of Legal and Compliance.

BlackRock Submits Amended S-1 Filing for its ETF Products

On May 9, Bloomberg and ETF analyst James Seyffart announced that BlackRock plans to update its Ethereum and Bitcoin ETF products. Hence, the asset manager has presented an amended S-1 application conveying the new changes to the SEC.

The new updates will include provisions for in-kind creation and redemption processes as an alternative to the Trust’s conventional cash creation and redemption process. Like many other filings, BlackRock’s amended applications remain subject to the SEC’s approval. In his tweet, Seyffart noted that he and Eric Balchunas, another renowned ETF analyst, expect approval for in-kind within this year.

NEW: Amended S-1 just dropped for BlackRock's Ethereum ETF — $ETHA. Looks like the main change is added language around allowing for in-kind creation/redemption when approved by the SEC.

(@EricBalchunas & I expect SEC approval for in-kind at some point this year) pic.twitter.com/HWkTfrDNsJ

— James Seyffart (@JSeyff) May 9, 2025

Meanwhile, BlackRock remains the most valuable Bitcoin ETF with about $44.71 billion in cumulative net inflows, $64.45 billion in net assets, and $2.14 billion in value traded. On May 9, Bitcoin ETFs recorded gains of over $300 million. BlackRock contributed significant portions of yesterday’s profits with a $356.2 million cash inflow. As a result of the net inflows, Bitcoin ETFs’ cumulative net inflow rose to over $40 billion. The total value traded and total net assets also appreciated significantly.