Franklin Templeton submits Bitcoin & Ethereum index ETF proposal to SEC

ETF proposal by Franklin Templeton includes Bitcoin and Ethereum, pending SEC's stringent evaluation.

Key Takeaways

• Franklin Templeton's new ETF combines Bitcoin and Ethereum in a single fund.
• SEC's approval depends on anti-fraud measures linked to regulated futures markets.

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The SEC has received a proposal to list and trade the Franklin Templeton Bitcoin & Ethereum Crypto Index ETF. The new ETF, managed by Franklin Templeton, aims to offer investors exposure to both Bitcoin and Ethereum, combining these two major crypto assets in one index fund.

This ETF would allow investors to gain exposure to both Bitcoin and Ethereum without directly holding these volatile assets. The trust’s assets will consist of Bitcoin, Ethereum, cash, and short-term instruments with a maturity of fewer than three months.

The fund will be monitored by the BNY Mellon, which serves as both the custodian and transfer agent, while Coinbase Custody will manage the digital assets.

The Franklin Crypto Index ETF aims to reflect the performance of an index comprising Bitcoin and Ether, based on the CF Institutional Digital Asset Index, a benchmark designed to track the largest digital assets in line with prevailing capital markets.

According to the filing, the ETF will be the first of its kind to hold both Bitcoin and Ether, making it a unique asset in the digital currency ETF space.

Shares of the Franklin Crypto Index ETF will be issued in blocks of 50,000 shares, with the value reflecting the net asset value (NAV) of Bitcoin and Ether held by the fund. The fund will not directly engage in activities like staking or income generation from the digital assets it holds.

The SEC typically approves crypto-related ETFs when there are strong measures in place to prevent fraud and manipulation. In this case, the proposal highlights existing oversight agreements with regulated futures markets, such as CME Bitcoin and Ether Futures, to ensure secure and transparent trading of the underlying assets.

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