BlackRock Engages with SEC Crypto Task Force on Regulatory Guidance
BlackRock recently met with the US Securities and Exchange Commission’s (SEC) Crypto Task Force to discuss a range of crypto regulatory issues. The meeting, which took place on May 9, focused on topics such as tokenization, staking, and approval frameworks for exchange-traded products (ETPs).
During the meeting, BlackRock representatives presented an overview of the firm’s digital asset offerings, including the iShares Bitcoin Trust (IBIT), the proposed iShares Ethereum Trust (ETHA), and the BlackRock USD Institutional Digital Liquidity Fund (BUIDL). They sought guidance on how these products could be regulated under federal securities laws as the digital asset market continues to evolve.
The meeting included senior representatives from BlackRock’s regulatory affairs, legal, digital assets, and ETF markets teams. This engagement with the SEC follows a previous session on April 1, demonstrating BlackRock’s commitment to collaborating with regulators on crypto policy matters.
In addition to discussing existing products, BlackRock also explored the incorporation of staking features into ETPs. Staking has become a key issue in the industry, with discussions revolving around how proof-of-stake asset exposure in ETPs can comply with regulatory standards while ensuring liquidity and investor protection.
Tokenization was another topic of discussion during the meeting, with BlackRock seeking feedback on how tokenization efforts could fit within the current securities framework. Tokenization involves representing traditional assets on the blockchain as digital tokens, and BlackRock is exploring how this process can be regulated effectively.
The firm also proposed interim standards for crypto ETP issuers and requested the SEC to consider providing codified guidance that could be applied before formal rulemaking takes place. Additionally, BlackRock discussed criteria under Section 6(b) of the Exchange Act that could be used to evaluate whether a crypto ETP meets regulatory requirements for exchange listing, including considerations of market integrity and investor protection.
The meeting concluded with BlackRock raising technical questions about position and exercise limits for crypto ETPs and seeking clarity on how these limits could be structured to account for liquidity thresholds. Overall, the discussions between BlackRock and the SEC Crypto Task Force highlight the ongoing dialogue between industry participants and regulators as the crypto market matures.
As BlackRock continues to navigate the evolving regulatory landscape surrounding digital assets, its engagement with the SEC underscores the importance of collaboration and dialogue in shaping the future of crypto regulation.