Coinbase Custody Secures BlackRock’s Trust for Spot-Bitcoin ETF, Signaling SEC Lawsuit Resolution Imminent

The post Coinbase Custody Secures BlackRock’s Trust for Spot-Bitcoin ETF, Signaling SEC Lawsuit Resolution Imminent appeared first on Coinpedia Fintech News

In a surprising move that has sent shockwaves through the crypto world, financial giant BlackRock has applied for a spot-Bitcoin ETF. This filing comes amidst a period of intense regulatory scrutiny in the United States, making it an unexpected development.

Adding an intriguing element to the narrative, BlackRock has made the notable decision of selecting Coinbase as its custodial services provider. It’s worth noting that Coinbase is currently facing a lawsuit from the US SEC for alleged violations of custody rules and other charges. Should the SEC approve BlackRock’s filing, it could potentially lead to a swift resolution of the ongoing lawsuit.

Crypto market experts have shared their insights on the matter. Notably, popular analyst WhaleWire commented on the situation, pointing out that since Coinbase is non-compliant with the SEC, there is a high likelihood of the ETF application being rejected. They also highlighted the potential manipulation of prices through ETFs, suggesting that this rejection could be a positive outcome for bullish investors.

Another market analyst, Will Clemente, found the situation rather amusing. He observed the inconsistency in the fact that the SEC sued Coinbase despite approving its IPO in 2021. Now, with BlackRock partnering with Coinbase as its custodial partner amid the ongoing lawsuit, it raises further questions. It’s worth mentioning that BlackRock once referred to Bitcoin as an “index of money laundering.”

How will the SEC react to BlackRock’s move?

Some market participants argue that if the SEC greenlights BlackRock’s application, it would signify a clear bias, favoring larger players while pushing smaller ones out of the industry. This stance raises the possibility of Grayscale Investments, which has been actively pursuing the conversion of the Grayscale Bitcoin Trust into a spot Bitcoin ETF, taking legal action against the securities regulator if BlackRock’s filing receives approval.